Increase Authorised Capital
Increase in authorized or paid-up capital must be done with proper board resolution and filing of forms with Registrar of Companies.
Introduction
The authorized capital of a Company determines the number of shares a Company can issue to its shareholders. An increase in authorized capital might be required for issuing new shares and/or inducing more capital into the 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.
Reasons to Increase in Authorized Capital
The authorized capital of a Company determines the value and number of shares a Company can issue to its shareholders.
Paid-up Capital
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.
Authorized Capital
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.
Increase Capital
The authorized capital of a company can be easily changed by paying additional government fee, as prescribed by the Ministry of Corporate Affairs.
Board Approval
The increase in authorized capital of a Company must be approved by the Board of Directors of the Company.
How we help with Authorized Capital
Advisory
A Business Expert will review the present and proposed changes in authorized capital and the Articles of Association to understand the background of the company prior to beginning the process. The review would take 1 – 2 working days.
Board Resolutions
Once you obtain an understanding of the procedures involved in increasing the authorized capital, our Experts will draft the necessary Board Resolutions for the procedure.
Filing
Once the Board Resolutions are passed, our Experts will prepare and file the necessary documents with the Ministry of Corporate Affairs.
Increase Authorized Capital
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