Increase in Authorized Capital
Preparation of documents for increase in authorised capital
Shareholders’ Ordinary Resolution
Govt. Stamp duty payment
Increase in Authorized Capital - An Overview
The authorized share capital is a maximum permissible amount of share capital up to which company can issue and allot its equity or preference shares as the case may be. Special resolution of the members is required to increase authorized share capital. It can be increased for issuing new shares and/or inducting more capital into the Company. We can assist you with respect to the timelines, procedures compliances and e-filing with respect to the increase in authorized share capital of the Company.
The increase in authorized share capital facilitates further allotment of shares by way of Private Placement or Bonus Issue or allotment of Rights Shares or ESOP, etc.
The Stamp Duty is required to be paid at the time of filing of relevant Eforms with MCA and the same is different as per the respective State Stamp Duty Acts.
In relation to a company, it is the amount as mentioned in Clause V that is Capital Clause of the Memorandum of Association.
process OF - Increase in Authorized Capital
Step 1: Board Resolution:
The Company has to firstly conduct the Board meeting to consider and discuss the authority given in the Articles of Association (AOA) of the Company to increase in the authorised capital or not. If no, then alter the AOA and then call the general meeting for increase in the authorised capital.
Step 2: Ordinary Resolution for increase in authorised capital:
The Company will conduct General Meeting of the members and pass thereat an ordinary resolution for increase in authorised capital of company and consequential changes to the Memorandum of Association.
Step 3: Filing of necessary forms:
Once the Ordinary Resolution for increase in authorised capital of company is passed, the company will file forms MGT-14 for filing of resolutions and Form SH-7 along with necessary documents for increase in authorised capital of company with the Registrar of Companies (ROC) through MCA portal.
Step 4: Approval of the ROC:
Upon receipt of the Forms of increase in authorised capital of the Company by the Registrar of Companies, and if it is satisfied with the forms filed and compliance made, he will process the forms and approve such increase in authorised capital. Once the form is approved, the Master data of the Company will be updated on the MCA portal.
Documents Required for Increase in Authorized Capital
- Details and breakup of increase in capital
- Ordinary resolution for increase in authorised capital
- Alteration of MOA
- DSC token of Director for filing of forms.
Frequently Asked Questions
Authorised capital is defined as the maximum limit of the share of a company that can be shared with the shareholders of the company.