Increase Authorized Share Capital
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Increase Authorized Share Capital
A company upon its incorporation records the foundation upon which it is built – its objectives, founding members and importantly its Increase Authorized Share Capital in its charter documents. The Companies Act, 2013 (Act) defines “authorized capital” or “nominal capital” to mean the maximum amount of share capital, as authorized by the company’s memorandum i.e. the maximum value of shares the company may issue. What this denotes is the maximum value of securities that the company can issue in a legal manner.
Now, as the business grows and expands, its natural needs foremost include getting funding. This can be in the nature of either debt or equity. Whenever a company chooses to go for the equity route to raise money, it is then supposed to first check the value of share capital already issued and subscribed against the authorized share capital of the company.
Generally, in all cases of share subscription fresh shares are issued to a new investor in the company and in all such cases where the ceiling of the authorized capital has already been reached, the company has to first undertake an increase in its authorized share capital.However, share premium is excluded from the definition of authorized capital.If the company wishes to expand its business or want to meet its working capital requirements then for inducting more capital it has to increase its authorized capital first.It can be done by passing a Board resolution followed by a ordinary resolution in the Extra Ordinary General Meeting of the Company.
Cost of Increase Authorized Share Capital
Increase in Authorize Capital @Just Rs 3,500/-(All inclusive)
Get your authorized share capital increased with Unilex at a very reasonable cost and hassle free.
Note: The above mentioned fee will vary as per your existing authorized capital
Documents For Increase Authorized Share Capital
- MOA & AOA
- Ordinary Resolution
- DSC of the Director
Procedure For Increase Authorized Share Capital
Conducting Board Meeting(1-3 Working Day)
- The Board meeting of the company will be conducted to approve the resolution and call the Extra Ordinary General Meeting (EGM) for passing the ordinary resolution
Holding Extraordinary Meeting(1-2 Working Day)
- Hold the Extra-ordinary General meeting (EGM) on due date and pass the necessary ordinary Resolution, for increasing the authorized capital
Filling Forms & Submissions(1-2 Working Day)
- On being satisfied that Company has complied with prescribed requirements the Registrar shall approve the increase in the authorize capital,afterwards the desired share allotment could be made.
FAQ’s About Increase Authorized Share Capital
What is minimum Share Capital Requirement?
The Authorized Share Capital has to be minimum Rs. 1 Lac and there is no minimum limit for Paid Up Share Capital.
What is the difference between Authorized Capital & Paid up 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 partof the Authorized Capital for which Shareholders have made the investment into the Company.
What documents are required for increasing the capital?
MOA, AOA, documents for Board Meeting of the Company and documents for Extra Ordinary General Meeting (EGM) of the Company.
What is time limit to file change of capital documents with ROC?
The time limit is 30 days from passing of the Board Resolution for Increasing of Authorized Share Capital.