Increase in Authorised Capital

Overview

Every business needs more funds to run a company. The funds can be required for long term as well as for short term. In case of short term funds the company can take loan and in case of long term funds the company will require more funds. So, for private limited company it is necessary to increase the authorized capital of the company.

Essential Requirements

The company can increase its Authorised share capital by fulfilling two ways:

• After obtaining approval of members by ordinary resolution
• If it is authorized by its article of association

Benefits

• 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.
• Increase in company offering: With the increase in authorized capital, additional compensation may be offered by the company to shareholders,  investors , partners, employees ,etc.
• Other benefits: Once the company has gone public, additional equities may be easily sold to raise capital. A successful  public company with stock will usually find it easier to borrow money.

How to register?

Procedure

• Verify Article of Association of the company
• Assemble a board meeting
• Conduct extra ordinary general meeting
• File Registrars of company form
• Allotment of shares

Documents Required

Required Documents

The documents required are as follows:

• A copy of the digital signature certificate is required from any authorized director of the company.
• A copy of the modified and the latest version of memorandum of association is required.
• A copy of the modified and the latest version of the article of association is required.
• A copy of the company’s incorporation certificate is required.
• A copy of the company’s PAN card is required.