INCREASE IN AUTHORISED SHARE CAPITAL

What is Authorised Share Capital?

It is the maximum amount of the capital for which shares can be issued by the Company to shareholders. The Authorised capital is mentioned in the Memorandum of Association of the Company under heading of “Capital Clause”. It is even decided prior to incorporation of the Company. The Authorised capital can be increased at any time in future by following necessary steps as required by law.

Procedure to Increase the Authorised Share Capital of a Company:

1. Convene Board Meeting- To increase the authorised share capital, first, convene a Board Meeting by providing notice to the Director. At the Board Meeting, obtain approval from the Board of Directors for increasing authorised share capital. Then fix a date, time and place for conducting an Extra-Ordinary General meeting to obtain approval of shareholders for the increase of authorised share capital and making changes to the MOA of the company. Finally, obtain approval of the Board of Directors of Company Secretary present at the meeting to present notice of Extra-Ordinary General Meeting to the shareholders. Based on the approval, present the Notice of Extra-Ordinary General Meeting to all shareholders, Directors and Auditor of the Company.
2. Extra-Ordinary General Meeting- conduct the Extra-Ordinary General Meeting and obtain shareholders’ approval in the form of an ordinary resolution for increase of authorised capital.
3. File ROC Forms- Form SH-7 must be filed by the company within 30 days of passing of ordinary resolution.
4. Conclusion- Registrar would approve the filing and increase the authorised share capital of the company. The new authorised share capital of the company would be reflected on the MCA portal.

Documents required for Increase in Authorised Share Capital:

1. Notice related to EGM.

2. Authorized True copy of Ordinary Resolution.

3. Authorized True copy of Board Resolution

4. Changed Memorandum of Association showing higher authorised capital

5. Changed Articles of Association showing higher authorised capital

6. A DSC from any authorized director of the company

7. Copy of Company’s Certificate of Incorporation

8. A copy of the company PAN card.