Increase Authorized Share Capital
Enhance your company’s financial flexibility by increasing your authorized share capital with Global Consultant. Our expert team will manage the compliance and documentation process, ensuring a seamless experience from start to finish. This vital step allows your company to raise funds effectively while maintaining robust governance.
- Why Choose Global Consultants for Increasing Authorized Share Capital?
● Expert Guidance: Our experienced consultants provide tailored advice to ensure compliance with all regulatory requirements.
● Comprehensive Services: We handle everything from drafting resolutions to filing necessary forms with the Registrar of Companies (ROC).
- Overview of Authorized Share Capital
Authorized share capital represents the maximum number of shares a company can issue to its shareholders. According to the Companies Act of 2013, there is no minimum requirement for increasing share capital, allowing companies the flexibility to adjust their capital base as needed.
- Process of Increasing Authorized Share Capital
Step 1: Review Articles of Association (AoA)
Check if your AoA permits an increase in authorized share capital. If not, you will need to amend it.
Step 2: Hold a Board Meeting
The board must discuss and approve the proposal to increase authorized share capital.
Step 3: Call for an Extraordinary General Meeting (EGM)
Notify shareholders at least 21 days before the EGM to discuss the capital increase.
Step 4: Pass a Special Resolution
At the EGM, shareholders must pass a special resolution to approve the increase, requiring at least a 75% majority.
Step 5: File Necessary Forms
Submit Form SH-7 to the ROC within 30 days after passing the resolution.
Step 6: Issue New Shares
Once approved, the company can issue new shares to raise additional capital.
- Checklist for Increasing Authorized Share Capital
● Verify provisions in the AoA.
● Ensure compliance with the Companies Act of 2013.
● Notify shareholders for the EGM.
● Pass necessary resolutions and file with the ROC.
● Maintain accurate documentation throughout the process.
- Benefits of Increasing Authorized Share Capital
● Enhanced Financial Flexibility: Increasing your capital base allows for additional funding opportunities and business expansion.
● Improved Borrowing Capacity: A higher share capital enhances your company’s net worth, making it easier to secure loans and attract investments.
● Accommodate New Investments: More authorized capital provides room for existing and new investors, promoting business growth.
- Why Global Consultant?
At Global Consultant, we pride ourselves on our commitment to excellence and customer satisfaction. With a team of over 300 experienced professionals, we handle secretarial work for thousands of companies each month, ensuring a hassle-free experience in increasing your authorized share capital.
- FAQs
A Pvt Ltd company can increase its share capital by passing a special resolution during an Extraordinary General Meeting (EGM) and filing the necessary forms with the Registrar of Companies (ROC).
MGT-14 is not required if only the resolution for increasing authorized capital is passed. However, it may be needed for other amendments.
No, a company cannot raise funds beyond its authorized capital without first increasing it.
The required documents include the revised Memorandum of Association (MoA), Articles of Association (AoA), board resolution, and the appropriate forms to be submitted to the ROC.
As per the Companies Act of 2013, there is no specified minimum capital requirement for private companies, allowing flexibility in setting authorized share capital.
The process can vary but typically takes a few weeks, depending on the promptness of shareholder approvals and ROC processing times.
If a company does not increase its authorized share capital, it cannot issue additional shares, which may limit its ability to raise funds and attract investors.
Yes, a company can increase its authorized share capital as many times as necessary, provided each increase is approved through the proper channels and documented accordingly.
Yes, non-compliance with regulations regarding share capital can result in penalties, fines, or restrictions imposed by the ROC.
The authorized share capital is determined based on the company’s growth plans, capital needs, and strategic objectives, typically decided by the promoters and board of directors.
Yes, shareholders can oppose the increase during the EGM. A special resolution requires a minimum of 75% approval, so dissenting votes can prevent the increase.
Increasing authorized share capital enhances financial flexibility, improves borrowing capacity, and allows for accommodating new investments, facilitating business growth.
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