Rules 71 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 71 is the procedure to get the Tribunal's approval when a company consolidates or divides its shares into shares of a larger amount in a way that changes shareholders' voting percentages. Rule 72 lets a company appeal to the Tribunal against a Government order converting its debentures or loans into shares under section 62(4).
An application for approval of a consolidation and division of share capital into shares of a larger amount that changes the voting percentage is filed in Form NCLT-1 with Annexure B documents (rule 71(1)). The company advertises it under rule 35 and, at least fourteen days before the hearing, serves notices by registered post on the Regional Director, the Registrar of Companies, SEBI for listed companies and any other regulator (rule 71(3)); objections are served on the same authorities (rule 71(4)). The words "Central Government" in rule 71(3)(b) and (4) were replaced by "Regional Director" by G.S.R. 29(E) of 15 January 2019. Under rule 72, a company may appeal within sixty days from communication of a Government order under section 62(4), in Form NCLT-9. Read as amended up to the National Company Law Tribunal (Amendment) Rules, 2020 (G.S.R. 80(E), 3 February 2020). Later amendments should be checked.
Rule 71: application under the proviso to section 61(1)(b)
Rule 71(1): form
An application for approval of the Tribunal for consolidation and division of all or any of the share capital into shares of a larger amount than the existing shares, which results in changes in the voting percentage of shareholders, is filed in Form NCLT-1 with the documents in Annexure B. See our guide to section 61. Companies planning a restructuring of share capital can get help from our increase in authorised capital team, which handles capital alterations.
Rule 71(2): particulars
The application sets out, among other things:
- (a) the provision of the Articles authorising the consolidation or division;
- (b) the existing capital structure;
- (c) the new capital structure after the consolidation or division;
- (d) the class of shares consolidated or divided;
- (e) the face value of shares before and after; and
- (f) the justification for the consolidation or division.
Rules 71(3) and (4): notices and objections, as amended
As amended by G.S.R. 29(E) of 15 January 2019, the company must at least fourteen days before the hearing: (a) advertise the petition in accordance with rule 35; and (b) serve, by registered post with acknowledgement due, a notice with a copy of the application on the Regional Director, the Registrar of Companies, the Securities and Exchange Board of India (for listed companies) and the regulatory body if the company is regulated under any other Act. Where an objection is received from a person whose interest is likely to be affected, the applicant serves a copy on the Regional Director, the Registrar of Companies, SEBI (for listed companies) and any other regulator, on or before the hearing. For advertisement, see the article on rule 35.
Rule 71(5): order
On hearing the application or any adjourned hearing, the Tribunal may pass such order, subject to such terms and conditions, as it thinks fit.
Rule 72: appeal against the order of the Government under section 62(4)
Rule 72(1): the Government order
Where a Government, by virtue of section 62(4), in public interest, converts debentures or loan, or any part, into shares in the company on terms that appear reasonable to the Government, even if the terms of issue of the debentures or the raising of the loan do not include an option for such conversion, rule 72(1) describes the situation. For the section, see our guide to section 62.
Rule 72(2): appeal in Form NCLT-9
If the terms and conditions of conversion are not acceptable to the company, it may within sixty days from the date of communication of the order appeal to the Tribunal in Form NCLT-9. The Tribunal, after hearing the company and the Government, passes such order as it deems fit. For the NCLT-9 format, see the NCLT-9 guide. The fee is in the Schedule; see the article on rule 112 and the Schedule of Fees.
Annexure B, serial number 6 (section 61(1))
- Copies of memorandum and articles of association.
- Copies of audited balance sheets for past 3 years.
- Resolution for allowing such consolidation or division and providing justification for the same.
- Documents in proof of new capital structure and class of shares being consolidated or divided.
- Affidavit verifying the petition.
- Bank draft evidencing payment of application fee.
- Memorandum of appearance with copy of the Board's Resolution or the executed Vakalatnama, as the case may be.
- Two extra copies of the application.
- Any other relevant documents.
Rules 71 and 72 at a glance
| Item | Rule | Form | Notices or period |
|---|---|---|---|
| Consolidation or division changing voting percentage | 71(1) | NCLT-1 with Annexure B | Advertisement and notice at least fourteen days before the hearing |
| Notice to authorities | 71(3)(b) | Registered post, acknowledgement due | Regional Director, ROC, SEBI (listed), other regulator |
| Objections | 71(4) | Copy served | Same authorities, on or before the hearing |
| Appeal against section 62(4) order | 72(2) | NCLT-9 | Within sixty days of communication |
An example
Pinnacle Auto Limited, a listed company, resolves to consolidate its shares into shares of a larger face value, and the change alters the voting percentages of its shareholders. It files in Form NCLT-1 with the three years' balance sheets and the justification resolution, advertises under rule 35 and, at least fourteen days before the hearing, posts notices to the Regional Director, the Registrar of Companies and SEBI. A shareholder objects; Pinnacle serves the objection on the same authorities before the hearing.
What a practitioner checks
- That the consolidation changes voting percentages, which is what triggers rule 71.
- That the notice list names the Regional Director, ROC, SEBI (if listed) and any sector regulator, in the amended form.
- That Annexure B serial number 6 is complete, including two extra copies.
- For rule 72, the date of communication of the Government order and the sixty-day limit.
Need help with a share capital alteration?
Notices have to reach the right authorities in the right time. For help with a capital alteration or an application to the Tribunal, speak to our increase in authorised capital team.
Key takeaways
- Consolidation or division changing voting percentages needs Tribunal approval on an application in Form NCLT-1 (rule 71(1)).
- Notices go to the Regional Director, ROC, SEBI (listed) and other regulators at least fourteen days before the hearing (rule 71(3)).
- "Regional Director" replaced "Central Government" in rule 71(3)(b) and (4) by G.S.R. 29(E) of 15 January 2019.
- An appeal against a section 62(4) order is in Form NCLT-9 within sixty days of communication (rule 72).
Read next
- Rule 70: refusal to register a transfer
- Rule 35: advertising a petition
- Annexure B, part 1: documents to attach
- Section 61: alteration of share capital
Disclaimer: Based on the National Company Law Tribunal Rules, 2016 (G.S.R. 716(E)) as amended up to the National Company Law Tribunal (Amendment) Rules, 2020 (G.S.R. 80(E)), consulted on 3 October 2026. Later amendments, fees, forms, NCLT practice directions and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.