PRACTICE DETAILS
- Lawyer Mr. Shaman Jain
- Skills Secretarial Compliances
- CATEGORY Compliances, Secretarial Compliances
ABOUT THIS PRACTICE
Maximum number of shares which can be issued by a private limited company is determined with the help of Authorised capital. A small amount of just 1 lakh minimum authorised capital can help in kick starting the journey of start ups . The capital clause of the Memorandum of Association needs to be changed by floating a special resolution of the board and this entire process plays a crucial role while issuing new shares or raising the capital for the company . During this time you may realise the requirement of issuing shares to existing promoters or new shareholders.
Benefits of Increasing Authorised Capital
- Allow further issue of capital: Authorized capital has to be increased whenever a need to increase paid up capital emerges reason being the restriction on raising capital beyond the specified amount in the MoA of the company.
- Increase in borrowing capacity: The borrowing capacity of a company is decided and supported by an increase in internal funding capacity of the company. Growing capital and escalating net worth bring an elevation in the borrowing capacity of the company .
Documents Required
- Digital Signature Certificate: DSC of one of authorised director to be provided
- MoA & AoA: A copy of latest amended MoA and AoA of the company
- CoI: Certificate of Incorporation of company to be provided
- PAN Card: Copy of PAN card of the company to be provided
Types of Share Capital in Companies
- Authorised capital: It is the maximum amount of capital a company may raise
- Issued Capital: It is that part of authorised capital, which is issued to raise capital
- Subscribed Capital: It is that part of issued capital, which is subscribed to be paid by the shareholders
- Paid-up Capital: It is that part of capital, which is subscribed and paid to company by the shareholders
Process of Authorised Share Capital Increase
- Consultancy for increase in capital
- Drafting of necessary resolutions
- Drafting of other necessary documents
- Provide documents prepared after signature
- Preparation of application for change
- Filing application and necessary documents with MCA
- Government processing time
- Update master data of the company
