Increase Authorised Share Capital
A company’s decision to enhance the maximum amount of capital it can issue to its shareholders is referred to as increasing authorized share capital. This is the general procedure:
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INTRODUCTION
Know about an increase in Authorised Share Capital
A portion of the company’s capital raised via the issuance of shares is known as the share capital. Only the amount of permitted capital specified in the corporation may be raised by a firm. The authorized capital may also be increased at any point following incorporation by paying an extra fee and stamp duty in order to expand the capability for capital raising.
A corporation can only issue shares up to the amount of capital that is permitted. As a result, it establishes the maximum number of shares that a business may issue, as specified in the MoA’s Capital Clause. It must first enhance the authorized capital in order to boost capital raising capabilities. The corporation must call a board meeting and send an application to the MCA in order to change the permitted capital clause.
ADVANTAGES
Benefits of increasing authorised capital
Allow further issue of capital
As previously stated, the corporation is only able to raise the maximum amount allowed under the MoA. Thus, permitted capital must be increased before paid-up capital may be increased, should the need arise.
Allow further issue of capital
An increase in internal financial capacity bolsters the company's ability to borrow money. Greater capital increases net worth and, consequently, borrowing capability.
A LIST OF DOCUMENTS
Documents required to increase authorised capital
Digital Signature Certificate
DSC from a designated director must be given
MoA & AoA
DSC from a designated director must be given
CoI
The company's certificate of incorporation will be given.
PAN Card
A copy of the company's PAN card must be supplied.
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Different Types of Company Share Capital
Authorised capital
It is the most capital that a business is allowed to raise.
Issued Capital
It is the portion of authorized capital that is distributed in order to raise funds.
Subscribed Capital
It is the portion of issued capital that shareholders subscribe to pay.
Paid-up Capital
It is the portion of capital that shareholders subscribe for and give to the business.
Increase capital in 3 easy steps
1. Respond to Quick Questions
- Our questionnaires take less than ten minutes to complete.
- Give the essential information and paperwork needed to convert a proprietorship to a partnership.
- Pay using a safe and secure payment gateway.
2. Experts are Here to Help
- Dedicated Relationship Manager
- Drafting the required documents and resolutions
- Modification of MoA and AoA Submitting an application for a capital increase
- Modification of the MoA and AoA
- MCA master data updated with updated details
3. Company's authorised capital is increased
- All it takes is 8 – 10 working days*
Process of authorised share capital increase
Day 1
- consulting for a capital increase
Day 2 - 4
- Drafting the required resolutions
- Adding additional required documentation
- Deliver signed documents that have been prepared.
Day 5 - 6
- Getting the change application ready
- submitting an application and the required paperwork to the MCA
Day 7 onwards
- Time spent by the government processing
- Update the company's master data.
Explore increase of authorised capital
Frequently Asked Questions
The following authorization or consent will be granted for the capital increase:
1. The Board’s consent; 2. The company’s members’ consent; and3. The relevant RoC’s approval.
The paperwork is to be submitted no later than thirty days following the shareholders’ approval of the share capital increase. A notice of increase is filed in SH-7 with modified MoA and AoA, and the passed resolution is notified in MGT-14.
- Yes, the MCA portal’s company master data shows the entire approved and paid-up capital.
- The government fee for each electronic form submitted to the MCA is determined by the company’s authorized capital. Although just little, the government cost for online filing rises in tandem with the growth in authorized capital.
- The increase in the company’s paid-up capital is included in the package cost as well, but the share transfer is not.
