When activities of the company are increasing day by day and pursuant to that company need funds by the way of borrowing and capital infusion then the company has option to increase its paidup share capital up to the level of its authorised share capital. Hence whenever there is the need to have finance to meet liquidity and other financial requirements on short term basis to keep, maintain and have consistent growth of the business of the company and for that purpose increase in the capital is the immediate requirement.
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Both public limited company and private limited company are allowed to increase paid up capital. However, there are restrictions on private limited company that they can not issue shares to general public
By increasing the capital you can grow the business. If you have idea of growing business then you need to infuse a good amount of paid up capital into your business.
More capital will result in tapping more ideas related to invention. Hence, by increasing the paid up capital, the company can become more innovative
By increasing capital we can easily give competition to the market as technology is changing very fast. Hence, to compete and to stay in market, more capital will be required.
With the change in environment, market is changing very fast. Hence, to give more satisfaction to consumer we have to make our business better and for that we have to need increase our paid up capital.
Following are the methods through which a company can increase its paid up share capital:
Now let’s try to discuss them in brief:
Whenever the Company having a paid-up share capital, at any time decides to increase the subscribed Share capital of the Company, any one of the above methods can be used for increasing the share capital of the Company.
Authorised share capital means that maximum amount of money which company can raise through share capital. It is also known as nominal capital.
No, a company can be incorporated without Authorise share capital.
A company can appoint maximum fifteen Directors. However by passing special resolution a company may appoint more than fifteen directors.
No, Paid-up Share Capital can be equal or less than the authorised share capital but cannot be more than authorised share capital.
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