The authorised capital is a maximum share capital of the company which sets limits within which the shares are issued by the company. When a company intends to increase its share capital by further issue of share capital which is beyond the authorised capital of the company, then before making such an allotment, increase in authorised capital is initiated.
The Articles of Association of the company must not restrict such amendments and should have the necessary power or authority to increase authorised share capital. In the absence of it, the Articles of Association will have to be amended as per the provision of Section 14 of the Companies Act, 2013. Approval from the shareholders in the general meeting is required.
It increases the capacity of the company to raise more capital. An increased capital may help the business to expand.
A company with higher authorised capital gets preference in getting loans. Increased capital results in higher net worth, thereby increasing the borrowing capacity.
The class of shares with which the authorised is required to be increased.
Holding and convening the BM to approve the increase in authorised capital and fix date, time, and place for holding EGM for shareholders’ approval.
Convening EGM to pass an ordinary resolution for an increase in authorised capital and alteration of MOA in its capital clause.
The documents as required to be prepared for filing the form for the alteration of MOA.
Form SH 7 is required to be filed with ROC for getting the capital altered.
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Authorised capital is a maximum share capital of the company which sets limit within which the shares are issued by the company.
The Ordinary Resolution in General Meeting is required to be passed for increasing the authorised share capital.
A. Form SH 7 is required to be filed with the resolution passed in general meeting and amended MOA within 30 days of passing the resolution.
Yes, the increase in authorised capital will be reflected in the Master Data of the company on the MCA portal.
The fees that is required to be paid will depend on the paid-up capital of the company.
Shareholders of the company with the majority voting rights have the power to increase the authorised share capital of the company.
It refers to that part of the authorised capital that is unissued. The total of issued and unissued capital should add-up to the authorised capital.
It is not mandatory to allot shares when the authorised capital is increased. The company has the power to keep capital unissued.