Increase Authorized Capital of Company
- Stamp Duty as per state on increased capital
- Approval from Shareholders’
- Simple and Secure Online Process
- Dedicated Professional
- Expert CS Advice
- Increase your capital in 7-10 days
Get Quote Instantly in a Minute
Introduction of Increase Authorized Share Capital of Company
When the Company issues shares to its Members in lieu of the funds received that Capital is known as share capital. A company can only raise its capital to the extent of its Authorized Share Capital mentioned in the Memorandum of the company. Further, if the Company raises its Authorized Share Capital any time after its incorporation by payment of fee and stamp duty. A Company can only issue shares to the extent of its Authorized Share Capital
In a general context an authorized Share Capital means the maximum amount of share capital which a Company can allocate to its shareholders during its life as authorized by its constitutional documents. It can be altered with the permission of the Members of the Company.
Need for Increase in the Authorized Share Capital
- For issue of Further Capital:- For issuing more capital it cannot raise capital beyond the amount prescribed in the Memorandum of Association. Therefore, in case the need arises to increase the paid-up capital the Authorized Share Capital must be increased.
- Increase in the borrowing capacity:- Increasing the Authorized Share Capital of the Company helps in increasing the internal funding capacity which supports the borrowing capacity of the company. Higher the capital the higher the net worth.
Documents Required
Digital Signature Certificate of the one of the Authorized Director;
Copy of the latest Memorandum of Association and Articles of Association of the Company
Process of Increase in the Authorized Capital of the Company
1. Complete the Application Form
2. Document Processing
3. Conducting the Board Meeting and passing the necessary Board Resolution
4. Conducting the Members of the Meeting
5. Approval from the Ministry of Corporate Affairs
Increase Capital of Company starting from ₹ 6000/-
- Professional Consultation
- Filing of E-Forms with ROC
- Drafting of Documents
- Preparation and Filing of Application
How to Increase the Share Capital of the Company?
- Check whether the Articles of Association contains the provision for increase of authorized capital. If not then alter the articles
- Call a Board Meeting by giving notice of not less than 7 days for proposing the matter of alteration of share capital and issue the notice of EOGM.
- Hold an EOGM on a specified date and time and take the approval of the shareholder by way of an ordinary resolution and alter the MOA of the company.
- File the respective form SH-7 within 30 days from the date of passing of the ordinary resolution for increasing the share capital.
FAQ's on Increase in Capital
The amount of government fees depends upon the amount Authorized Share Capital to be increased and the same is auto calculated at the MCA website along with the stamp duty fees. You can also check the fees by entering the CIN and the revised share capital on MCA Enquire Fees Calculator.
Members of the company with the majority voting rights have the power to increase the authorized share capital of the company.
It refers to that part of the authorized capital that is not offered for issue. The total of issued and unissued capital should add-up to the authorized capital.
The e-form SH-7 is to be filed for increasing the Authorized Share Capital which to be filed within 30 days of passing the Ordinary Resolution.
It is not mandatory to allot shares when the authorized capital is increased. The company has the power to keep capital unissued.
The additional fees in case of company having share capital:
- Delay up to 6 months – 2.5 % for the period of delay
- Delay beyond 6 months – 3% for the delay beyond 6 months