Process to Increase Authorized Capital

Authorized capital is the maximum amount of capital issued by the company. It is given under the capital clause of the memorandum of association. It is also known as nominal capital which can be increased as per the company’s requirement as it cannot issue shares more than its authorized capital. The following are the steps of the process for an increase in the authorized capital: A company must check the provision in the articles whether it gives permission for changing the articles or not. In case, the provision is not mentioned in the AOA then it needs to be changed by the company. In the meeting, an ordinary resolution is passed for increasing the Authorized share capital. The approval of members is received for the resolution passed with the attached explanatory statement. A company is required to file E-Form SH-7 and MGT-14 for resolution with the registrar. A certified copy of ordinary resolution for change in capital EGM notice with explanatory statement The rate of stamp duty depends on the state where the office is located. The MCA portal has given an e-stamp duty rate. A listed company must be sent a copy of the altered MOA to the stock exchange within twenty-four hours of sending a notice to ROC. The company shall also post on the website in two working days. A Memorandum of association is submitted with the authorized capital at the time of Incorporation of the company to the Registrar of Companies (ROC) for forming a company. The amount of capital can be changed by the company in the future in need of expansion of the business. Step 1: Check the Article of Association (AOA)
Step 2: Holding the meeting of the Board of Directors (BOD)
Step 3: Conducting the Extraordinary General meeting (EGM)
Step 4: Filing of Form with the Registrar of Companies
The Documents required for filing SH-7 are:
The following are the details of Form MGT-14:
The Documents required for filing MGT-14 are:
Step 5: Payment of stamp duty
Step 6: Intimation sent to the Stock Exchanges for Listed Entities
Conclusion