Increase Authorised Share Capital

Here’s What You’ll Need

Once you have the below documents ready, submit them digitally to raise your company’s authorised share capital. Zolvit uses the best-in-industry security protocols to ensure your documents are always secure.

• Certified true copy of ordinary resolution to increase the authorised share capital
• Copy of altered MoA
• Copy of altered AoA
• A copy of the company’s incorporation certificate
• A copy of the company’s PAN card
• DSC copy of any authorised director of the company

Did you know?

A limited company with a share capital may, under section 61 of the Companies Act, 2013, amend the capital clause of its Memorandum of Association by passing an ordinary resolution in a general meeting, if its Articles of Associations grant it the ability to do so.

Within 30 days, a notification of modification of the authorised share capital must be submitted with the ROC in Form No. SH-7.

An Overview on Raising Authorised Share Capital of a Company

The maximum number of shares a private business can sell is determined by its permitted capital. According to the new Companies Act of 2013, no minimum capital is required. The vast majority of today's companies are self-funded and cash-strapped. As a result, they are unable to spend huge sums on getting a higher authorised share capital ceiling during the incorporation process. However, once the company expands they will need to raise the authorised share capital limit to issue more shares and make up for funding needs.

In order to issue additional shares or raise the allowed capital capital clause of the memorandum of association must be changed by adopting an ordinary resolution by the board.

Benefit of Raising Authorised Share Capital

• Increases Available Funding

  A company can raise any amount of authorised capital it wants, and the MoA will reflect this with changes. As a result, raising authorised capital has a cumulative effect on the overall funding capacity of the company.

• Enhances Borrowing Capacity

  The company's overall net worth grows in tandem with the rise in share capital. This increases the company's borrowing capability even further.

• Jack ups Overall Net Worth

  Increasing authorised capital has a cumulative effect on the total share capital of the firm. In fact, a company's net worth can be jacked up by merely increasing authorised share capital.

Checklist to Raise Authorised Share

• Check the AoA for a provision to enhance the approved share capital
• If the AoA does not allow for an increase, it must be changed in accordance with Section 14 of the Companies Act of 2013
• To approve the increase in authorised share capital, issue a notice for a board meeting to amend the AoA
• Call an extraordinary general meeting to amend the articles of association in order to approve the increase in authorised share capital
• Give notification at least seven days before the board meeting and at least 21 days before the EGM.