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Procedure to Increase Authorised Share Capital

Online Legal India LogoBy Online Legal India Published On 23 Dec 2020 Updated On 17 Jan 2023 Category Compliance

What is meant by 'Increase of Authorised Share Capital'?

The Authorised Share Capital is that part of a company's equity which has been raised by issuing shares and selling them to stockholders in exchange for capital. However, a Company may need to increase its authorised share capital before issuing new equity shares and increasing paid-up capital. Read to know more about the Increase Authorised Share Capital.

Pre-requisites of increase in authorized capital

  • An Articles of Association must have a clause for an increase in authorized capital
  • Shareholders' approval is a must.

The process to Increase Authorised Share Capital

Step 1- Verifying approval within the Articles of Association

An approval from AOA is a pre-condition for expanding the Authorised Share Capital.

Step 2- Board meeting to notify the incidence of EGM

Notice for Board Meeting is served to every member/shareholder, director, auditor of the company, where the date, place, time are mentioned where the EGM is to be held to discuss and vote on the matter of increasing of Authorised Share Capital as per Section 101 of the Companies Act 2013.

Step 3- Extraordinary General Meeting

Once the meeting is in session, voting then takes place regarding the matter of the increase in the share capital is presented forth. Once the approval has been granted, and the resolution is passed, the explanatory statement to the same is attached, and the increase in the Authorised Capital is made.

Step 4- ROC Form documenting

Within a time, the frame of 30 days of the passing of Ordinary Resolution, Form SH-7 must be filed with the concerned Registrar of Companies (RoC).

 

 

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Anjali Malhotra

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Anjali Malhotra

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