Authorized capital is the maximum no. of share capital that a company can issue to its shareholders. Grab all the benefits for the investors by increasing Share Capital of the Company!
Only 3 steps to follow
Let us know the changes to be done
We will classify and draft the amended MoA
File the necessary documents on MCA portal
Increase Authorised Capital
The amount of capital to invest in the Company is one of the most critical decisions that have to be made by the supporters when a company is in its incorporation stages. As the business begins to pick up, the Company may look to expand its operations, expand in size, scale, or structure. To make that dream a reality, it may require the driving of more funds into the Company, basically increasing/Changing the share capital of the Company. Sometimes, the amount of necessary capital might surpass the limit of the authorized capital at the time.
It is the authorized capital of a private company that determines the maximum number of shares it can issue. Most start-ups begin with the minimum authorised capital of Rs. 1 lakh, which becomes too little as the business grows. To issue new shares or to raise the Authorised Capital, the capital clause of the Memorandum of Association is amended by passing a special resolution by the board.
What are the Characteristics of Change in Share Capital?
Share Capital is a privilege to a predefined amount of the share capital, carrying with its specific rights and liabilities.
According to the Sale of Goods Act, 1930 – Goods implies any movable property other than exceptional cases, money and stock and shares.
Share Capital is recognized by its number, though this provision will not have any significant impact to a share held by an individual whose name is entered as the holder in the record of a depository.
As well, a share of any part in an organization is a movable property transferable in the way mentioned in the articles of association of the Company.
Detailed steps for change in Share Capital
Authorization In Article Of Association
The article of the organization must contain the arrangements concerning approving it to increase its authorized share capital. If there is no provision in the article, we will assist you to modify its article of the relationship as per the arrangement of segment 14 Companies Act 2013.
Notice of the executive gathering will be given to all the top managerial staff according to the arrangement of segment 173(3) of the Companies Act 2013. To gather the executive gathering, the strategy would be:
1) Approval of the executives for increment in approved share capital;
2) Fix day, date, time and setting of holding an additional regular gathering (EGM) of the organization.
3) We will assist you to support one individual either executive of the organization or organization secretary, to notify the regular gathering;
Notice Of EGM
The notification of the additional regular gathering, (EGM) will be given to all the investors and executives of the organization.
To hold the Extra Ordinary General Meeting of the organization on the date chosen.
Intimation To The ROC
Subsequently, taking approval in shareholder's meetings, We will help the company to draft the altered MOA to change in share capital. A company has to inform/notify about the same by filing form SH-7 with the MCA. Moreover, the form must be submitted in 30 days from the date of resolution.
We shall be ready with all your compliance such as filing of MGT-14, which is required to be filed within 30 days of passing the resolution in the comprehensive gathering. Form SH-7 also needs to be filed within 30 days of passing the resolutions.
The documents must be filed within 30 days after obtaining consent from boards for the share capital increase with the MCA (Ministry of Corporate Affairs). The resolution passed is notified in MGT-14 and notice of increase is filed in SH-7
DSC of authorized director of the company
Modified or the latest version of MoA
Modified or the latest version of AoA
Certificate of Incorporation
Company PAN card.
1. What is Authorised Share Capital?
It is the maximum amount of the capital for which shares can be issued by the Company to shareholders. The Authorised capital is mentioned in the Memorandum of Association of the Company under heading of “Capital Clause”. It is even decided prior to incorporation of the Company. The Authorised capital can be increased at any time in future by following necessary steps as required by law.
2. What is the difference between authorized capital and paid-up capital?
The fundamental difference between the authorized share capital and paid-up share capital is that the authorized share capital is the most significant value of shares that an organization can issue to its investors. While a Paid-up Capital is the piece of approved share capital for which the shares were given to the investor.
3. Can a company spend share capital?
The Company usually undergoes changing its name for following general reasons:
If the Company is changing its business activity
A company willing to change the existing name to reflect the brand it deals with
In cases the government orders to do so
4. How does the company raise capital from market initially?
A company can raise share capital from the primary market by means of various methods. The methods may induce public issues, offer for sale, private placement, right Issue, and tender process.