Increase Your Company’s Authorized Capital from India’s Recommended CA Panel
As per Section 2(8) of the Companies Act, 2013, the Authorized Capital limit is specified in the MOA under the Capital Clause. As the business begins to pick up, the company may look to expand its operations, size, scale or structure. To make it possible, it may require the injecting in of more funds into the company, basically increasing the share capital of the company. The authorized capital is the maximum amount of capital for which the Company can issue shares to the shareholders. A company may take the necessary steps required to increase the authorized capital limit in order to issue more shares, but it cannot issue shares exceeding the authorized capital limit in any case.
Need help with increasing the Authorized Share Capital?
The Articles of Association is the document that contains the rules and regulations regarding the internal working of the company. So, before any action can be taken regarding the increase/reduction in the authorized capital, the Articles of Association must be verified to check whether a provision exists that allows for a change in the authorized capital of the company.
If the provision exists, then the process becomes simplified. However, if the provision does not exist, then the Articles of Association must be amended first as set out under Section 14 of the Companies Act, 2013 (“Act”), and then only can the company proceed with the alteration of authorized capital.
What is the Authorized Share Capital of the Company?
As per section 2(8) of the Companies Act, 2013 the capital which is authorized by the memorandum of the company to be the maximum amount of share capital of the company is called the authorized capital of the company.
Why Does a Company needs to increase its authorized Share Capital?
- Expanding business
- Preparation for new venture
- Hiring new Resource / Expertise on the Board
- Increasing number of Investors
Guided Requirements from your Company’s End
Documented AOA of the Company
Board Meeting
Shareholders’ Approval
The company’s AOA must have a clause for an increase in capital in the future. If not, the organization is required to modify the Articles as per Section 14 of the Companies Act, 2013
As soon as the board of directors decides to Increase Authorized Capital, the company’s shareholders must be addressed.
Adaptation in MOA
Acquaint with ROC
After getting approval from the Board and the Shareholders, the Company’s MOA should be modified for increasing the Authorized Capital.
The alteration in the company’s MOA, AOA, increase in the Authorized Capital, should be informed to the Registrar of Companies (ROC) and the Ministry of Corporate Affairs (MCA).
How we can help in Appointment of Director
Fill our Application Form.
⟶1
We shall Call You for further Necessary Documents and details as and when required.
⟶2
⟶3
⟶4
⟶6
FAQ
What is an Authorized Capital for a Company?
The capital which is authorized by the memorandum of the company to be the maximum amount of share capital of the company is called the Authorized Capital of the Company. It is required to be mentioned in the company’s MOA.
How can a Company increase its Authorized Capital?
A company can increase its Authorized Capital by initiating an amendment in its AOA (if needed). Consequently, the company needs to organize a Board Meeting to get approval from the Directors and the Shareholder.
Which Act of the Indian Govt. oversees the Increase in Authorized Capital process?
The procedure of Increase in Authorized Capital for a company is regulated by the Company Act, 2013 of the Indian Government along with the regulations of the Registrars of Companies (ROC).