Do you want to consult us? Click Here
Take the first step towards your
goal by filling out the form above.
Get a call from our
certified expert.
Get the job done and
receive a certification.
The total amount of shares a corporation is permitted to issue is known as authorized share capital. If the articles of association of a company allow, then Section 61(1) (a) of the Companies Act, 2013 permits a limited company to change its memorandum in its general meeting and increase its authorized share capital by the amount it finds suitable.
If quality service is your need then rest assured you are at the right place. You just have to click to reach us. We, Law Samadhan, will take care of all the formalities that are to be done for your service.
To acquire funds for a promising project or expansion of the operation, which is necessary for the growth of a company, the promoters of a company need to increase the capital. In other words, a company may need to increase the authorized share capital before the promoters can issue additional equity shares and raise paid-up capital.
In order to increase its authorized capital, a Company is required to get approval from its members by an ordinary resolution. Post it; the company has to make changes to its Memorandum of Association to increase its authorized capital.
It is done in the following steps:As per section 61, the Article of Association of the company is required to verify that there are arrangements approving it to expand its authorized Share Capital.
The meeting is conducted to get approval from the shareholders to increase the authorized share capital at the time, date, and place that is mentioned on the notice.
At this stage, the clause of authorized capital in the MOA of the Company is altered.
Within 30 days of the alteration of clause, the company is required to file form SH-7 with the Registrar of Company within the along with a copies of Board Resolution, EGM Ordinary Resolution, Notice of EGM along with Explanatory Statement and altered Memorandum of Association.
Digital signature certificate of any authorised director.
Memorandum of Association updated
Articles of Association updated
Certificate of incorporation
PAN card of company
Authorized Capital is important because it sets the limit on the amount of shares that a company can issue. It is also important for a company to have a sufficient authorized capital in order to raise funds for its operations and growth.
Authorized Capital can be increased by amending the MOA of a company. This process typically involves passing a special resolution at a general meeting of shareholders, filing the necessary documents with the Registrar of Companies, and obtaining the necessary approvals.
The time taken to increase Authorized Capital may vary depending on the completeness of the application and the processing time at the Registrar of Companies.
Yes, there is a fee required to increase Authorized Capital, which is usually based on the increase in the Authorized Capital.
Yes, Authorized Capital can be increased without increasing the issued capital.
Yes, Authorized Capital can be decreased by amending the MOA of a company and following the same process as increasing Authorized Capital.
Not having enough Authorized Capital can result in a company being unable to issue new shares, which can limit its ability to raise funds for growth and operations. It can also result in legal penalties and fines.
The increase of authorized capital does not affect the shareholders directly, as it only increases the maximum number of shares that the company can issue in the future. However, if the company chooses to issue new shares, it may dilute the existing shareholders' ownership stake.