Increase in Authorized Share Capital of Company

Authorized Capital:

The company Act 2013 defines that Authorized capital means the maximum number of share capital that a company can issue to its shareholders. The introduction of Section 2(8) of the Companies Act 2013 allows companies to increase authorized share capital. After registration every company whether it's Public Limited Company or Private Limited Company there are many compliances which a company need to comply daily. With time when the company business expansion they need more funds for its development and also in case of issue share that beyond the increase in authorized share capital then it requires increasing the authorizes share of the money of the company

The procedure of Increase Authorized Share Capital:

Step 1:  Authorization must in Article of Association.
 
To increase authorized capital, the company must confirm by the Article of Association according to Section 61. Firstly, you will have to check the Company Article of Association before to go for an increase in authorized capital. If AOA contains a provision for an increase in authorized capital, you can smoothly proceed towards the incremental of share Capital.

In contrast, if AOA doesn't permit an increase in authorized capital, then you need to change the articles according to section 14 of the company act 2013, which provide the provision of growth in authorized capital.

 
Step 2: Calling a Board Meeting
 
These are the following thing which will be discussed and approved in the board meeting by BOD of the company :

The approval of shareholders is mandatory to increase the authorized capital of the company.
Time Date and Venue of Extraordinary General Meeting (EGM) of the shareholders should be fixed to get approval for an increase in authorized share capital.
In BOD meeting, you have to be sent a proper plan which contains all essential items relating to the matter to approve authorized capital.
Authorize Director or company secretary will issue approve and issue a notice of EGM
 

Step 3: Holding of EGM
 
Call the Extraordinary General Meeting (EGM) of the shareholder of the company by sending a notice with a clear plan and the resolution to be passed by AOA to increase the authorized share capital.

Step 4:  Alteration in Memorandum of Association (MOA)
If you need to increase the authorized capital share, you need to alter the clause of authorized capital in the MOA of the company.

Step 5:  Roc Compliance
In this step the company authorize the board to file mandatory forms SH -7with the registrar company along with the following documents :

Copy of certify Board Resolution passed at EGM.
Copy of Extra-Ordinary General Meeting (EGM)
Copy Altered Memorandum of Association (MOA)

The procedure of how your company can increase authorized share capital for your expended business in India. With time when the company business expansion they need more funds for its development and also in case of issue share that beyond the increase in authorized share capital then it requires increasing the authorizes share of the money of the company.

Drafted By:
CS.A.Maniraj.,B.Com.,ACS.,CA(Fin), Independent Director 
Certified CSR Professional., Certified GST Professional.