When the Company issues shares to its Members in lieu of the funds received that Capital is known as share capital. A company can only raise its capital to the extent of its Authorized Share Capital mentioned in the Memorandum of the company. Further, if the Company raises its Authorized Share Capital any time after its incorporation by payment of fee and stamp duty. A Company can only issue shares to the extent of its Authorized Share Capital
In a general context an authorized Share Capital means the maximum amount of share capital which a Company can allocate to its shareholders during its life as authorized by its constitutional documents. It can be altered with the permission of the Members of the Company.
Legal Window can help you with the increase of Authorized Share Capital of the Company just by following certain steps by providing the best assistance, timely delivery and guaranteeing the highest customer satisfaction You may get in touch with our team on 072407-51000 or email email@example.com
Need for Increase in the Authorized Share Capital
Types of Share Capital in the Companies
|Authorized Share Capital||Issued Capital||Subscribed Capital||Paid-up Capital|
|It is the maximum amount of capital which a company may raise during its lifetime.||It is part of the authorized share capital which is issued to raise capital.||It is part of issued capital which is subscribed by the Members to be paid to the Company.||It is the part of capital which is subscribed and paid to the Company by the Members.|
Process of Increase in the Authorized Capital of the Company
1. Complete the Application Form
You are requested to first fill the simple questionnaire provided by our expert team which will enable us to know the case of increase in the Authorized Share Capital of the Company.
2. Document Processing
At the second step you will be required to produce the documents in accordance with the questionnaire filled based upon which case will be dealt so that we can arrange them as per the requirement and for further processing.
3. Conducting the Board Meeting and passing the necessary Board Resolution
After arranging the documents we will begin with the drafting of Board Resolution (if not passed ) for increasing the Authorized Share Capital of the Company
4. Conducting the Members of the Meeting
The approval of Members will be accorded through convening of a Meeting and to pass necessary resolutions for increasing the Authorized Share Capital of the Company which shall be filed with the ROC in respective e-form SH-7 along with the requisite MCA fees and stamp duty.
5. Approval from the Ministry of Corporate Affairs
Lastly, after the approval of an application is received from the ROC which will be provided through e-mail which signifies that the respective changes in the Authorized Share Capital and the same shall be updated on the portal of MCA.
What All You Get
How to Increase the Share Capital of the Company?
There is a process to be followed for increasing the authorized share capital of the company. We need to follow the same in order to fulfill the compliances.
FAQ's on Increase in Capital
The amount of government fees depends upon the amount Authorized Share Capital to be increased and the same is auto calculated at the MCA website along with the stamp duty fees. You can also check the fees by entering the CIN and the revised share capital on MCA Enquire Fees Calculator.
Members of the company with the majority voting rights have the power to increase the authorized share capital of the company.
It refers to that part of the authorized capital that is not offered for issue. The total of issued and unissued capital should add-up to the authorized capital.
The e-form SH-7 is to be filed for increasing the Authorized Share Capital which to be filed within 30 days of passing the Ordinary Resolution.
It is not mandatory to allot shares when the authorized capital is increased. The company has the power to keep capital unissued.
The additional fees in case of company having share capital:
- Delay up to 6 months - 2.5 % for the period of delay
- Delay beyond 6 months - 3% for the delay beyond 6 months