Increasing Authorised Capital India
A company Needs funds for short or long term requirements. It can issue new shares and infuse more capital to increase its authorised capital. Authorised capital is the maximum no of share capital that a company can issue to its shareholders.
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Authorised Capital India
It is the authorised capital of a private company that determines the maximum number of shares it can issue. Most start-ups begin with the minimum authorised capital of Rs. 1 lakh, which becomes too little as the business grows. To issue new shares or to raise the Authorised Capital, the capital clause of the Memorandum of Association is amended by passing a special resolution by the board.
Benefits of increasing authorised capital India
Increases Share Capital
Enhances Borrowing Capacity
Documents Required for increasing authorised capital India
The documents must be filed within 30 days after obtaining consent from boards for the share capital increase with the MCA (Ministry of Corporate Affairs). The resolution passed is notified in MGT-14 and notice of increase is filed in SH-7
- Digital Signature Certificate: A copy of a DSC from any authorized director of the company
- Memorandum of Association: A copy of the modified or the latest version of MoA
- Articles of Association: A copy of the modified or the latest version of AoA
- Certificate of Incorporation: A copy of the company’s incorporation certificate.
- PAN card: A copy of the company PAN card.
How To Issue New Shares To Increase Authorised Share Capital?
To Existing Promoters
To increase the authorised capital and to issue new shares to existing promoters the following steps are required. A board meeting is called for all shareholders, and Form PAS-3 is filed with the Registrar of Companies (RoC) to intimate the allotment of new shares.
To New Shareholders
To issue new shares to new shareholders a valuation report is required, from a certified chartered accountant.