Increased Authorised Capital
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What is Authorized Capital?
It is the maximum limit of share capital up to which a company can issue its shares to shareholders. A company is not authorized to issue shares beyond the specified limit. Hence, if a company wants to issue shares beyond the limit then it has to amend its MOA as per the Companies Act.
Verify AOA of the Company:A company must check its MOA and AOA about the limit of authorized capital. If the issue of shares is going to be beyond the specified limit in MOA then it has to increase its authorized capital. Before increasing, the company must check whether it is can do so legally as per the norms of association of the company. Altering AoA is one option to amend such provisions.
Alteration of AOA:To alter the AOA, the company must take approval from the shareholders in an annual general meeting or extra-ordinary general meeting. Such altered AOA must be filed with MCA within 30 days from the date of the resolution. Once the AOA is altered, it can proceed with further procedure to increase authorized capital.
Holding Board Meeting:A board meeting must be arranged to take the approval of the board to increase authorized share capital. Further, to decide the date and time to call an AGM or EGM to take the shareholders’ approval. A notice for holding an AGM or EGM must be sent to all the shareholders as per the rules. A director must be authorized to file all the necessary forms with the MCA.
Hold Shareholders Meeting:The company shall hold the AGM/EGM on the specified date and time to take the approval for an increase in authorized capital. An ordinary resolution must be passed in the meeting.
Intimation to the ROC: After taking approval in shareholders meeting a company shall draft the altered MOA to increase authorized share capital. A company has to intimate about the same by filing form SH-7 with the MCA. The form must be filed in 30 days from the date of resolution. The documents required to file the said form are as under.
Documents Required for Authorised Capital Increase
A certified true copy of Board resolution for alteration in AOA
A certified true copy of Board resolution for alteration in MOA
Notice of AGM/EGM
A certified true copy of Shareholders resolution
Altered copy of AOA
Altered copy of MOA
Process & Timeline for Company Registration
Frequently Asked Questions
Private Limited Companies are required to have a minimum authorized share capital of Rs.1 lakh and Rs.5 lakh for public limited companies
The form must be filed within 30 days after obtaining consent from shareholders for the share capital increase. The resolution passed is notified in MGT-14 and notice of increase is filed in SH-7 with altered MoA and AoA.
Yes, the total authorized and paid-up capital is displayed on the Master Data of the company on the MCA portal.
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