Increase Authorized Capital
A Registered Company can issue new equity shares by increasing its Authorized Capital.
Digital Filings can help you in…:
Determining and suggesting appropriate changes in Authorized capital
Drafting the Board Resolutions
Obtaining approval from the Ministry of Corporate Affairs (MCA)
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Understanding Increase in Authorized Capital
The number of equity shares that can be issued to shareholders depends on the Authorized Capital of the company and in order to increase the number of equity shares the company needs to increase its Authorized Capital and pay the prescribed registration fees to the Registrar of Companies.
The authorized capital paid by the Company at the start of its operations is disclosed in the Memorandum of Association (MOA), while in most of the cases the initial authorized capital of a company is INR 1 Lakh.
A company can increase its authorized capital by notifying the matter to the Board of Directors and drafting a resolution on the same. On receiving approval, the company can make the desired changes in MOA and Articles of Association (AOA) of the company.
Key-Elements of Increase Authorized Capital
Existing Promoters
If a Company decides to increase authorized capital and issue new shares to existing promoters, a board meeting is called upon and a Form PAS – 3 needs to be duly filed with the Registrar of Companies (RoC), intimating the allotment of shares.
New Shareholders
It gets quite complicated when a Company decides to increase authorized capital by issuing shares to new shareholders. The process necessitates the Company to generate a valuation report from a registered Chartered Accountant.
Required Documentation Chart
Required Documents
- MOA and AOA in word format
- Complete list of existing Board Members and Shareholders
- Proposed Capital of the Company (along with types)
- Digital Signature of Authorized Director
- Letterheads along with rubber stamp of existing Directors
We are Glad to Help!
Authorized Capital of a company can be easily altered by paying required Government Fee, as prescribed by the MCA, while the process also requires an approval from Company’s Board Directors.
Trained Partners @ Digital Filings can effectively assist a Company in increasing its authorized capital.
Pocket-Friendly Options
Basic
Package Include:
Increase in Authorized Capital of up-to INR 10 Lacs- (Above price includes all taxes and relevant government fees.)
Standard
Package Include:
- Increase in Authorized Capital of up-to INR 25 Lacs (Above price includes all taxes and relevant government fees.)
Premium
Package Include:
- Increase in Authorized Capital of up-to INR 100 Lacs (Above price includes all taxes and relevant government fees.)
How we Do It…
A Registered Company is obliged to increase its Authorized Capital in order to issue new shares. Digital Filings can help Companies in making desirable changes in MOA and AOA to accomplish their objective.
Quick Glance in Past
Partners @ Digital Filings will carefully study the Company’s AOA in order to understand the initial and proposed changes made in authorized capital. The expert would take around two days for a detail analysis of the documents before initiating the process.
Approval on Proposed Alteration
The new proposed limit of authorized capital is to be finalized in a meeting with Board Directors. A notice is also sent to the existing Directors stating the agenda of the meeting. Digital Filings Expert will assist you in drafting the proposed resolution and would follow the prescribed SS – 1 format for the convention of Board Meeting (as instructed by Institute of Company Secretaries of India / ICSI).
Shareholders Meeting
An Extraordinary General Meeting (EGM) is conducted in order to attain the approval from existing shareholders for increase in Authorized Capital. Also, in order to take the process further, it is obligatory to obtain the consent from more than 75% of shareholders. Experts @ Digital Filings suggest Companies to notify their intentions at least 21 days prior to EGM.
You are Future Ready Now!
Once the special resolution is passed by shareholders, Team @ Digital Filings will submit the required documents along with the prescribed Form SH – 7 to the concerned authority for the final screening and here the Company is all set to increase its authorized capital.
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