Conversion of Compulsory Convertible Preference Shares Into Equity Shares

The concept of conversion of Compulsory Convertible Preference Shares (CCPS) into Equity Shares is not governed by any section of the Companies Act, 2013 but if combined the certain Provisions of Companies Act, 2013, one can easily opine the conversion. By complying the provisions of Sections below mentioned conversion of Preference shares into Equity shares can be easily done.

Before getting into the article it is better to know what is Compulsory Convertible Preference Shares (CCPS). There are types of Preference Shares being issued by the Company and one of them is CCPS (Compulsory Convertible Preference Shares).

Compulsory Convertible Preference Shares (CCPS) are those shares which are issued with the terms that it can be converted into n number of equity shares after a period of time (that is mentioned in the contract or as discussed earlier).

Compliance of the Following Sections are required to be done:

Following are the steps required to followed for the Conversion of Compulsory Convertible Preference Shares into Equity Shares:

1. Call Board Meeting of the Board of Directors of the Company:

2. Hold the Board Meeting and pass Board Resolution for:

3. E-forms Filing with the Registrar of the Companies:

4. Issue of Share Certificates:

5. Maintenance of Statutory Registers: