Home / Increase Authorized Capital

Updated on 16 Apr 2021    9.00 AM IST | 4 min read

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?

Eligibility Consultation

Document Preparation

Application Drafting

Government Fees

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 –
    • 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)

    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.

Authorized Capital FAQ’S

Authorized capital is the maximum capital that the company is legally authorized to issue to shareholders.
Documents needed to be filed by the company to increase the authorized 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
In case of no provision mentioned, company has to amend the articles of association first to proceed further to increase the authorized capital.
MEET US

What Clients Say

Customer delight is our main goal and we are very serious about it.
Prakash Verma

Prakash Verma

“Finacbooks.com is a perfect example of a great customer service dealing with the best of accountancy services.“
Prakash Verma Signature
Praveen Chauhan

Praveen Chauhan

“They offered us good quality services in a least possible time at a best Price.“
Praveen Chauhan Signature
Pradeep Kochhar

Pradeep Kochhar

“Finacbooks.com is a trusted network of highly qualified accounting professionals who not only provided us quality accountancy services but also supported us by answering our each & every query on time without any delay. “
Pradeep Kochhar Signature
Informational, useful and resourceful

Blogs

Catch up our trending topics, news etc. in a simple, detailed and most professional way.
QRMP Scheme under GST

QRMP Scheme under GST

12 Apr, 2021

What is the QRMP scheme? According to the GST Council's recommendations, a new scheme of quarterly returns with monthly payments... Read More

How to file backdated Income Tax Return (ITR)?

How to file backdated Income Tax Return (ITR)?

05 Mar, 2021

What is backdated income tax return (ITR)? Backdated ITR is a previous year/years ITR filed by the individuals to make their tax... Read More

Important Changes in GST rules from January 1, 2021

Important Changes in GST rules from January 1, 2021

13 Feb, 2021

On 22nd December 2020, GST department issued a notification no. 94/2020 and made specific changes in the GST rules which have already... Read More

Latest News & Updates

View More

Due Dates

  • Monthly GSTR 8 (Summary of Tax Collected at Source (TCS) and deposited by e-commerce operators) for Mar 2021

     Apr 10th ,2021

  • Monthly GSTR 7 (Summary of Tax Deducted at Source (TDS) and deposited) for Mar 2021

     Apr 10th ,2021

  • GSTR 1 for Mar 2021 (turnover more than INR. 1.50 Crore)

     Apr 11th ,2021

  • GSTR 6 (Details of ITC received and distributed by ISD) Monthly Filing Due Date for Mar 2021

     Apr 13th ,2021

  • Last date of depositing the fifth instalment of advance tax (if liable to pay any) for FY 2020-21 for individual and corporate taxpayers

     Apr 15th ,2021

  • GSTR 3B for Mar 2021 (Annual Turnover of more than Rs 5 Cr in Previous FY)

     Apr 20th ,2021
View More