Increase in Authorised Capital

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Increase in Authorised Capital

The authorized capital is the maximum amount of capital which can be raised by a Company through the issue of shares to its shareholders. An increase in authorized capital might be required for issuing new shares and/or inducing more capital into the Company. Our professional can help you concerning the filing and issuing of shares concerning the increase in the authorized share capital of the Company.

Authorized Capital is mentioned in the capital clause of the Memorandum of Association of the company. And if the company wants more capital then, the capital clause has to be amended by the members by passing a special or ordinary resolution (as there is no specification about nature of resolution under S. 61) as per S. 61 of the Companies Act, 2013 at a meeting. Following are the pre-requisite before filing an application to MCA for an increase in the authorized capital:

• Check/verify whether AoA provides for an increase in authorized capital. If it does not provide then the same must be amended to the effect under section 14 of the Companies Act, 2013 by passing a special resolution.
• A board meeting for notifying the call for Extraordinary meeting (EGM) must be held.
• An ordinary or special resolution (preferably Special resolution) for an increase in authorized capital i.e. for alterations in MoA & AoA must be passed in such EGM.

After fulfilling the above pre-requisite, file the prescribed form i.e. e-Form SH-7 with the registrar within 30 days of passing of the ordinary resolution. Following documents must be attached:

• Board Resolution for an increase in authorized share capital.
• Board resolution for modification in the capital clause of MoA.
• Shareholder’s resolution passed in EGM.
• Altered copy of MoA & AoA.

Process of Increase in Authorised Capital

Documents required

1. Board resolution for notice of EGM of the Company.

2. Notice of Extraordinary General Meeting

3. Ordinary Resolution.

4. Altered Memorandum and Articles of the Company.

Frequently Asked Questions

The Authorized Share Capital has to be minimum Rs. 1 Lac and there is no minimum limit for Paid-up Share Capital.

The Authorized Capital of the Company is the maximum limit up to which a company can issue shares and Paid Up Capital is that part of the Authorized Capital for which Shareholders have invested in the Company.

MOA, AOA, documents for Board Meeting of the Company and documents for Extra-Ordinary General Meeting (EGM) of the Company.

The time limit is 30 days from passing of the Board Resolution for Increasing of Authorized Share Capital.

A company can increase its authorized capital by filing Form SH-7 within 30 days from the date of passing the resolution i.e. from the date of alteration.

Yes, Holding of AGM is mandatory to increase authorized share capital.

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