How to Modify Authorized Share Capital of a Company
Modify Authorized Share Capital
The share capital of a company is a part of capital which is raised through issue of shares. A company can raise the capital up to the limit of authorized share capital, which is prescribed in the Memorandum of Association. A company can increase the Authorized Share Capital at any time after incorporation by payment of additional fee and stamp duty. To modify the clause related to Authorized Share Capital at Memorandum of Association, company has to conduct a board meeting and pass a resolution for modify authorized share capital. Clause at the MoA has to be change accommodating the change in Authorized Share Capital and the same should be approved from Ministry of Corporate Affairs.
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Benefits of Increasing Authorized Share Capital
Expansion of Business
If a company planning for a business expansion or introducing a new business activity may require additional capital. In such cases, if the paid up capital reached the limit of Authorized Share Capital or the difference in the Authorized Share Capital and Paid up Capital wouldn’t meet the requirement of the situation, the company have to increase the Authorized Share Capital.Show Less
Enhance Borrowing Capacity
A company with good financials will always find interests investors. With the higher Authorized Share Capital, the value of the company as well rises, which supports the borrowing capacity of the company.Show Less
Further Issue of Shares
A company only can rise funds through shares up to the limit of Authorized Share Capital prescribed in the MoA and in the cause of demand of more capital, the company has to increase the limit of Authorized Share Capital and as per new limit, can distribute the share among the shareholders.Show Less
Documents Required for Increase Authorized Share Capital
DSC
Digital Signature Certificate
MoA & AoA
Copy of latest amended MoA and AoA
Certificate
Certificate of Incorporation
PAN
Copy of PAN Card of the Company
Types of Share Capital in Companies
Authorized capital
It is the maximum amount of capital a company may raise
Issued Capital
It is that part of authorized capital, which is issued to raise capital
Subscribed Capital
It is that part of issued capital, which is subscribed to be paid by the shareholders
Paid-up Capital
It is that part of capital, which is subscribed and paid to company by the shareholders
Increase Authorized Share Capital in 3 Easy Steps
Step 01
Fill up the registration form
Select any package suits your requirement · Fill up the form which will take less than 10 minutes · Make payment through secure payment gateway. Step 02
BookMyTM is Here to Help
Your queries will be answered quickly and effectively · Consultation on Increasing Authorized Share Capital · Provide details and documents required for increase capital · Drafting of necessary documents · Drafting of change of clause related to capital in MoA · Sending the drafts for approval from applicants · Receipt of signed documents from applicants · Filing Application for increase capital Step 03
Modification of MoA and AoA
Sharing updated MCA master data with increased capital All it takes 7 – 9 working days**Subjected to Government Processing Time.
Process to Increase Authorized Share Capital
- 1
Day 1 - 2
Consultation on Increasing Authorized Share Capital · Collection of Information · Collection of Required Documents (Scanned Copies) · Review of Documents and Information provided
- 2
Day 3 - 4
Drafting of documents including clause in MoA · Sending the documents to get signed from applicants
- 3
Day 5
Receipt of signed documents from applicants · Preparation and filing of application for Increase Capital
- 4
Day 6 - 9
Government Processing Time · Sharing of updated Master Data from MCA* · *Subjected to Government Processing Time
FAQ
Answer:The increase in authorized share capital requires:Board approval;Member approval; andRegistrar of Companies (RoC) approval. Accendoz
Answer:Yes. The updated total authorized and paid-up capital is displayed in the company’s Master Data on the MCA portal. Accendoz
Answer:Forms must be filed within 30 days of obtaining shareholder approval. This involves filing MGT-14 for the resolution and SH-7 along with the amended MoA/AoA. Accendoz
Answer:The government fee for MCA e-forms depends on authorized capital; increasing this limit will increase filing fees slightly. Accendoz
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