Increase in authorized capital in bangalore
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Overview
The maximum number of shares that a private business may issue is defined by its authorized share capital. According to the 2013 New Companies Act, there is no minimum capital increase requirement. The capital clause of the Memorandum of Association is updated by the board approving an ordinary resolution in order to issue
additional shares or increase the authorised share capital.
This sum of authorised share capital increase varies from business to business and could alter, but only with the consent of shareholders. Let’s say a firm has an authorised capital of ₹2 lakhs; in that case, it follows that it can issue shares for up to ₹2 lakhs. However, because it is flexible, this allowed capital may be increased or decreased as needed. Let’s imagine a firm has ₹1 lakh in allowed capital, but an investor wishes to put in ₹1 crore. In this case, the company can raise its authorized capital to ₹1 crore. The permitted share capital increase for company registration is covered here.
Advantages
Increase Authorized Capital : A company can raise whatever authorized capital as they decide upon and the same will be mentioned in the MoA with revisions. Hence, increasing authorized capital has an incremental effect on the overall company share capital.
Enhances Borrowing Capacity : With the increase in share capital, the company’s overall net worth also increases. This further enhances the borrowing capacity of the company. It could invite investments as the same can be easily accommodated if there is enough authorized capital.
Process
- Verify whether the company’s AOA has given the go-ahead to increase the authorized capital. If AOA is not permitted, a Special Resolution must be passed in order to change AOA.
- Hold a board meeting to establish the day, date, time, and location of the extraordinary general meeting as well as to enhance the company’s authorized capital. Give notice of the meeting’s day, date, time, location, and agenda to each member/shareholder, director, and auditor of the company.
- Convene, hold, and conduct the EGM at the time and location stated, and adopt a resolution to seek shareholder approval. If applicable, submit the required form within the timeframe.
- Change the company’s Memorandum of Association to increase the permitted share capital.
- If the shareholders’ resolution is approved, you have 30 days to file form SH-7 with the Registrar of Companies. Additionally, if the resolution is passed as a Special Resolution, form MGT-14 must be filed within 30 days after the resolution’s passage.
Faqs
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Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.