BBNC
Increase Authorized Share Capital

Authorized share capital is the maximum amount of the capital for which shares can be issued by the company to their shareholders. The authorized capital of the company is mentioned in the memorandum of Association of the company.
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Overview
In other words, the authorized capital of a company determines the maximum number of shares the company can issue. The Authorized Capital of a company can be increased at any time by the company by following the specific steps.

 

For Example: Company ABC has authorized capital of 10 lacs, and they have issued shares to their shareholders of 1 Lac Rs. Assuming the share price as 10 Rs per share. In the current situation, the company has Issued 1,00,000/10= 10,000 shares to their shareholders. The current paid-up capital of the company is 1 Lac. And the company can issue another 9 lac Rupees of shares to the same or new shareholders.



Benefits of Increasing Authorized Share Capital

Increases share capital

A company can raise investment through equity shares only up to the share capital prescribed in the MOA. Hence, increasing authorized share capital has an incremental effect on overall company share capital.

Enhances Borrowing Capacity

With an Increase in the share capital, the company’s overall net value also increases. This increases the borrowing capacity of the company.

Checklist/Requirements
  1. Digital signature certificate of director of the company
  2. MOA of the company (Memorandum of Association)
  3. Certificate of Incorporation
  4. PAN Card of the company
Process of Increasing authorized Capital of the company

Step 1: Share the required documents and Information

Step 2: Passing the board resolution

Step 3: Execute the shared documents

Step 4: Filing e-form with the ministry

Step 5: Approval from the government to increase the authorized share capital

Step 6: Share deliverables

Key Deliverables
  1. Updated MOA of the company
  2. Updates AOA of the company
Increasing authorized share capital

Why Choose Us

  Entrepreneur Friendly

We make the process so easy and fast that you will not even feel the headache of all the paperwork, and our professionals will provide you all the promised deliverable within a given span of time.

  Experienced Professionals

All our professionals are qualified and specialized in that particular work. Making sure no mistakes are done at the time of filings with the authorities so that company won’t have to pay any penalties due to mistakes.

  One Stop for All Your Requirements

We support you throughout the journey of your business, from the incorporation, Accounting and taxation support, Secretarial compliance support, and Legal support.

  Cost-Effective

We believe that cost plays a vital role in any company’s growth stage, that’s why we do not surprise our clients with hidden charges, you pay what you see in the initial proposal.


Frequently Asked Questions

 

1. What is the difference between paid-up capital and authorized capital?
An authorize capital is the total amount of shares a company can issue to their shareholders, and paid-up capital is the total amount of shares a company has already issued to their shareholders.
As per the Companies Act of, 2013 there is no minimum requirement for the authorized share capital while incorporating a Private Limited Company in India. However, it is advised to keep at least 10 Lacs as the authorized capital of the company.
Yes, if the investment amount is more than the authorized capital of the company, then the company cannot receive such investment, they have to increase the authorized capital first and then they can issue shares to shareholders.