Increase Authorized Share Capital
Increase Authorized Share Capital Of The Company
Authorized capital of a company comprises of number of shares a company can issue to its shareholders.
Increase in authorized capital is very necessary for issuing new shares and investing more & more capital
into the company. The starting capital of the company is usually Rs.1 lakh and it is clearly mentioned in the
memorandum of association of the company. Shareholders’ approval is needed in case company wants to
increase its authorized capital. A company can raise its authorized capital anytime with approval of
shareholders & paying additional fee to the registrar of companies (ROC). A resolution must be passed by the board of directors to start the process of increase in authorized capital as well as for making necessary
changes to the MOA & AOA of the company. It is one of the most critical decisions of the company that what would be the share capital and how can we increase the authorized share capital.
What Is Included In Our Package?
Documents Needed To Be Filed By The Company To Increase The Authorized Capital
The documents needed to be filed by the company to increase the authorized share capital are as follows -
1 Filing of form SH-7
2 Altered copy of MOA & AOA
3 Board resolution passed by the company
4 Resolution passed in extra ordinary general meeting (EGM)
5 Notice of EGM explanatory statement.
Process To Increase Authorized Share Capital
Verifying provision within the articles of association – In the first step, Company has to verify
that whether any provision is made within the articles of association in relation to increase in
authorized capital. If not, company has to amend the articles of association by passing a special
resolution to proceed further as per section 14 of the companies act, 2013.
Organizing board meeting – In the second step, board meeting is organized to decide when &
where extra ordinary meeting (EGM) will be held to discuss and vote on the matter pertaining to
increase in authorized share capital. When the date, place & time of the EGM are confirmed by the
board of directors, a notice will be issued to members/ shareholders / director as well as auditor of
the company. The notice issued in the board meeting should have a voting method on the basis of
which resolution is passed by the company to increase the authorized capital. In addition to it, the
explanatory statement is also enclosed.
Extra ordinary general meeting – In the third step, extra ordinary general meeting is held and
company decides upon increase in authorized share capital by the voting process. The voting is to
be done by members, shareholders, directors and auditors of the company as per the process or
method set up by the company. At the end of meeting, ordinary resolution is passed to increase
the authorized share capital of the company.
ROC form documentation – As per section 64, company has to mandatorily file form SH-7 to the
registrar of companies along with necessary fees & attachments within 30 days of passing of
ordinary resolution. Company has to submit the following documents along with e-form SH-7 –
Finally, ROC will check the form as well as the attached documentations. If found satisfactory, ROC
will approve the increase in authorized share capital of the company.
Board resolution to increase the authorized share capital
Altered MOA & AOA
Board resolution for modification in the capital clause of MOA
Shareholder’s resolution passed in extra ordinary general meeting (EGM)