Increase Authorized Capital
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Increase Authorized Capital
Authorized share capital is the number shares that a company can issue after stating in its memorandum of association/ articles of association. Needless to mention that authorized share capital is used to raise capital. Authorized share capital is also known as registered capital or nominal capital. The maximum value of securities that a company can legally issue. This number is specified in the memorandum of association of the company, when a company is incorporated, but can be changed later with shareholders’ approval. First we should check Articles of association of the company that there is power to increase Authorized share capital or not, if there is no power then we should Alter the articles as well after that we can increase authorized share capital. Companies on later stage might decide top increase the authorized share capital. This can be done under the provisions mentioned in section 61, Companies Act, 2013.
Company can increase the paid up capital of the company at any time by the way of Public issue, Private Placement, Preferential Allotment, Right issue and Bonus Issue till extent of its Authorized share capital of the company.
Request Increase Authorized/Paid up share capital online in Delhi, Mumbai, Bangalore, Kolkata, Kanpur, Bareilly, Lucknow, Kanpur, Ghaziabad, Ludhiana, Faridabad, Meerut, Varanasi, Srinagar, Amritsar, Allahabad, Chandigarh, Bareilly, Moradabad, Gurgaon, Aligarh, Jalandhar or any other cities in India.
Process to Increase Authorized Share Capital
A. Check for the approval in Articles of Association
Expansion of the Authorized share capital can be done only after the getting an approval in Articles of Association.
B. Conduct a Board meeting (discuss the incident of EGM)
The company needs to conduct a board meeting to declare that an EGM for discussion and voting has to be held. For which, the board is asked to come up with a date, place, and time of the EGM by a discussion. Once the EGM is finalized upon, company needs to issue a notice to every member/shareholder, director, auditor of the company to come join and cast vote on the matter of raising authorized share capital, as guided under Section 101 of the Companies Act 2013.
C. Conduct an EGM (Extraordinary General Meeting)
During the EGM, a practice of discussion and voting is conducted and the increase in the authorized share capital is mutually agreed upon. Post which, a Resolution is passed under Companies Act, 2013 to increase in authorized share capital of the Company.
D. File the ROC form and complete documentations
Once the ordinary resolution is passed away, Form SH-7 needs to be filed with the concerned RoC along with the necessary fees and attachments as specified under the Section 64 within 30 days of the passing of Ordinary Resolution.
SH-7 needs to be submitted along with the following documents:
1. Board Resolution for increase in authorized share capital;
2. Shareholders’ Resolution that has been passed in the EGM.
3. Altered MoA and AoA,
4. Board resolution for modification in the capital clause of Memorandum of Association;