Increase Authorised Capital
Increase Authorized Capital:
The authorized capital of a company is the maximum amount of share capital for which shares can be issued by a company. The initial authorized capital of the Company is mentioned in the Memorandum of Association of the Company and is usually Rs. 1 lakh. The authorized capital can be increased by the company at any time with shareholders’ approval and by paying an additional fee to the Registrar of Companies.
To begin the process for increasing authorized capital a resolution must be passed by the Board of Directors. In the Board Resolution, authorization must be provided for increasing the authorized capital of the company and making the necessary changes to the MOA and AOA of the company.
Authorized capital is increased by:
The authorized capital of a Company determines the value and number of shares a Company can issue to its shareholders.
Paid up share capital of a company is the amount of money for which shares were issued to the shareholder for which payment was made by the shareholder.
The authorized capital of a company can be easily changed by paying additional government fee, as prescribed by the Ministry of Corporate Affairs.
Most promoters incorporate their company with an authorized capital of Rs.1 lakh or Rs.10 lakh and issue shares with a value of Rs.1 lakh or less to founding members.
The increase in authorized capital of a Company must be approved by the Board of Directors of the Company.
Documents required for Increase Authorize Share Capital:- (All copies of documents should be self attested by the customer)
Certified true copy of resolution along with a copy of the explanatory statement under Section 102
Altered memorandum of association (Mandatory in case any change in MOA).
Altered articles of association
Process Required for Increase Authorize Share Capital:
For Increase in Authorized Share Capital
Calling for Board Meeting
Issue Notice of the Extra-ordinary General Meeting (EGM)
ROC Form filing
Concerned Registrar of Companies (ROC) will check the E-forms and attached documents and will approve the increase in authorized share capital.