Elevate Your Business with Increased Authorised Share Capital
Supercharge your business growth with our tailored service for increasing authorised share capital. Effortlessly navigate the process and unlock enhanced investment potential.
* Excluding Govt. Fees
Overview
For every business needs investment to operate in uninterrupted manner. Such investment is made in the form of Authorised Share capital by the Company. Businesses set a maximum limit to invest and then the amount is invested inthe form of share capital by subscribing to the shares of the Company. This amount is specified in the Memorandum of Association of every Company as “Capital Clause”.
Any Company that wants to increase investment in capital must alter its memorandum of association in pursuance of the Companies Act, 2013.
Definition under Companies Act, 2013
As per section 2(84) of the Act,” Shares” means a share in the share capital of a company andincludes equity as well as preference shares.
As per section 2(8) of the Act, “Authorised share capital” or “Nominal Capital” means suchcapital as is authorised by the memorandum of a company to be the maximum amount ofshare capital of the company.
Reasons for increase in Authorised share Capital
Procedure for increase in Authorised Capital
- Conduct Board Meeting in accordance with provisions of section 173 of Companies Act,2013 read with Secretarial Standard 1 on Board Meetings to consider and approve the following matters:
- the increase in Authorised Share Capital of the Company,
- Amendment in Capital Clause of Memorandum of Association of the Company,
- Convening of General Meeting of the Company
- After assent of the board members, call for a general meeting for approval of members to alter capital clause inter alia alteration in Memorandum of Association.
- Dispatch notices for calling an Extra Ordinary General Meeting (EGM)/Annual General Meeting (AGM) to all the members in accordance with provisions section 102 of Companies Act,2013 read with Secretarial Standard 2 on General Meetings.
- Accord approval of Members through ordinaryresolution at Extra Ordinary General Meeting (EGM)/Annual General Meeting (AGM) for increase in authorised share capital and change in capital clause of Memorandum of Association.
- File E forms MGT-14 (if applicable) and SH-7 to submit resolution with the Registrar of Companiesalong with the prescribed fee and e-stamp duty and with the following documents:-
- Certified True Copy of the Ordinary Resolution.
- Copy of altered Memorandum of Association (MOA)
- Extra-Ordinary General Meeting’s notice.
- Any other document, as may be required.The Registrar of companies shall register the alteration of the memorandum and after approval authorised capital will get increased and the same is reflected on the master data of the Company at MCA portal.
What is included in this
FAQs
Authorized capital is the maximum potential value of shares a company can issue, while paid-up capital is the actual value of shares that have been issued and paid for
Yes, Memorandum of Association is the primary document of the Company which specifically states the authorised share capital of the Companyunder the “CapitalClause”. It is mandatory to alter MOA for changing authorised capital of the Company.
E form MGT-14 (if applicable) and E formSH-7 arefiled in case of increase in authorised capital of the Company.
Section 13 and section 61 of the Act deals with the alteration in Memorandum ofAssociation. As per section 61 of the Act, to proceed for alteration, Company must have tocheck for the authority for the same in the article of associations. If article prohibits theCompany to increase its authorizedcapital then Company is required to alter its Article ofAssociation first to vest the authority to the Company.
No, the power to alter the capital clause of the Company vests with the shareholder of the Company.
