The authorised capital of a company is the limit up to which it can issue shares.
The process of increasing the authorised capital is 100% online and involves the approval of
shareholders in EGM and payment of a fee to the ROC and Stamp duty.FilingsZone will help
you to increase the Authorized Capital.
What is Authorized Capital?
It is the maximum limit of share capital up to which a company can issue its shares to
shareholders. A company is not authorized to issue shares beyond the specified limit.
Hence, if a company wants to issue shares beyond the limit then it has to amend its
MOA as per the Companies Act.
Verify AOA of the Company:A company must check its MOA and AOA about the limit of
authorized capital. If the issue of shares is going to be beyond the specified limit
in MOA then it has to increase its authorized capital. Before increasing, the company
must check whether it is can do so legally as per the norms of association of the
company. Altering AoA is one option to amend such provisions.
Alteration of AOA:To alter the AOA, the company must take approval from the shareholders
in an annual general meeting or extra-ordinary general meeting. Such altered AOA must be
filed with MCA within 30 days from the date of the resolution. Once the AOA is altered,
it can proceed with further procedure to increase authorized capital.
Holding Board Meeting:A board meeting must be arranged to take the approval of the
board to increase authorized share capital. Further, to decide the date and time to call
an AGM or EGM to take the shareholders’ approval. A notice for holding an AGM or EGM must
be sent to all the shareholders as per the rules. A director must be authorized to file
all the necessary forms with the MCA.
Hold Shareholders Meeting:The company shall hold the AGM/EGM on the specified date and
time to take the approval for an increase in authorized capital. An ordinary resolution
must be passed in the meeting.
Intimation to the ROC: After taking approval in shareholders meeting a company shall
draft the altered MOA to increase authorized share capital. A company has to intimate
about the same by filing form SH-7 with the MCA. The form must be filed in 30 days
from the date of resolution. The documents required to file the said form are as under.
Documents
Required for Authorised Capital Increase
A certified true copy of Board resolution for alteration in AOA
A certified true copy of Shareholders resolution
A certified true copy of Board resolution for alteration in MOA