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Increase in Authorised Share capital of Company

How to Increase in Authorised Share Capital of Company

The company may at any time increase the authorised share capital of the company as per Section 64 (1) of the Companies Act, 2013 and Rule 15 of Companies (Share Capital & Debentures) Rules, 2014 provided it is authorised by the article of association. The procedure is specified by the rules laid down by the Companies Act, 2013.  

Any company can exercise the option to increase the share capital. The authorised share capital of the company means the total value of shares the company can issue. Further, to issue the shares in excess of the existing share capital the company has to increase the share capital of the company. The company share capital can be increase independently by the company or with central government order

The step to increase the authorised share capital as follows,

1) Powers to increase the share capital must be specified in the articles of the company If articles allow then can be proceed with an increase in authorised share capital.

2) If articles of an association authorised then convene the board meeting to discuss the agenda “increase in authorised share capital”.

3) Issue the board meeting notice at least 7 days before the meeting.

4) Discuss the agenda and accord the consent of the board of directors on the increase in the authorised capital of the company.

5) Approve and issue the notice of the EGM along with agenda & explanatory statement to all members, directors & auditor of the company.   

6) Conduct an extraordinary general meeting (EGM) to pass the ordinary resolution.

7) Alteration in the memorandum of association (MOA) of the company.

8) After getting the shareholder’s consent, the director so authorised will file the requisite E-form SH-7 for the department approval within 30 days from the date of passing of the ordinary resolution.

9) The form contains the following attachment like a copy of board resolution, copy of EGM ordinary resolution, copy of EGM notice with an explanatory statement and copy of altered MOA.

10) After the approval, the new authorised share capital will be reflected on the MCA portal.

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11 Mar

Prem Singh

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