The authorised capital of a Company determines the number of shares a Company can issue to its shareholders. An increase in authorized capital might be required for issuing new shares and/or inducting more capital into the Company. The initial authorised capital of the Company is mentioned in the Memorandum of Association of the Company and is usually Rs. 1 lakh. The authorised capital can be increased by the company at anytime with shareholders approval and by paying additional fee to the Registrar of Companies.
To begin the process for increasing authorized capital a resolution must be passed by the Board of Directors. In the Board Resolution, authorisation must be provided for increasing the authorised capital of the company and making the necessary changes to the MOA and AOA of the company. Purminder Kaur & Associates can help you easily increase the authorised capital of your company.
Reasons to Increase In Authorized Capital
The authorised capital of a Company determines the value and number of shares a Company can issue to its shareholders.
Paid up share capital of a company is the amount of money for which shares were issued to the shareholder for which payment was made by the shareholder.
Most promoters incorporate their company with an authorised capital of Rs.1 lakh or Rs.10 lakh and issue shares with a value of Rs.1 lakh or less to founding members.
The authorised capital of a company can be easily changed by paying additional government fee, as prescribed by the Ministry of Corporate Affairs.
The increase in authorised capital of a Company, must be approved by the Board of Directors of the Company.
How we help with Authorized Capital
A Business Expert will review the present and proposed changes in authorised capital and the Articles of Association to understand the background of the company prior to beginning the process. The review would take 1 – 2 working days.
Once you obtain an understanding of the procedures involved in increasing the authorised capital, our Experts will draft the necessary Board Resolutions for the procedure.
Once the Board Resolutions are passed, our Experts will prepare and file the necessary documents with the Ministry of Corporate Affairs.