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Increase Paid Up Capital

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asked on Apr 13, 2016 at 20:07
by   NabilaShamsuddin
Hai,

With regards to increase of paid up capital under Compnies Act 1965, is it possible to convert a debt due to the directors (unclaimed remuneration) to paid up capital?

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answered on Apr 14, 2016 at 01:54
by   notalawyer
Can if the Company Secretary and Accountant agrees to it.
Converting company profits into Capital is a jail-able offence.
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answered on Apr 14, 2016 at 04:19
by   jeff005
Get your Comsec to advise you.

1/ Director Remuneration is a company expense.
2/ Loans from Directors (can be capitalized subject to several conditions)
3/ Unclaimed remuneration must be reclassified as owing to directors or temporary loans.
4/ Immediate increase in Paid Up share capital is the norm provided that it does not exceed the Authorized Share Capital (Solution = increase Authorized Share Capital ) and a EGM conducted with full agreement by all shareholders.
5/ Profits (before Tax) can be Capitalized via other venues. For eg.. Special shares allocated for employees. However, the employees receiving it have to pay their personal income tax on the allocated shares. Some Companies treat it as Bonus Shares Issued.(Provided it does not exceed Authorized Share Capital). These are non voting rights issued share capital.
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