Increasing Authorized Capital
It refers to the process of increasing the maximum amount of capital that a company is authorized to issue to its shareholders. The authorized capital represents the maximum amount of share capital that a company is permitted to issue under its Articles of Association or Memorandum of Association.
Criteria
The company needs to obtain a fresh certificate of incorporation from the MCA
needs to pay the fees for filing the necessary forms and documents
Shareholder Approval
Articles of Association (AOA)
Board Resolution to pass a resolution approving the increase in authorized capital.
Document Required
Financial statements(balance sheet, profit and loss account, cash flow statement, and notes to accounts)
Income tax return
GST returns
Board resolutions
Annual returns
Time required
The time required for increasing authorized capital can vary depending on various factors
Company’s compliance with the required regulations
the time is taken to obtain necessary approvals, and the
processing time is taken by the Ministry of Corporate Affairs (MCA) to approve the application.
time required for increasing authorized capital is approximately 15-30 days.
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FAQ
Authorized capital is the maximum amount of capital that a company is authorized to issue to its shareholders. It is mentioned in the company’s memorandum of association
To increase the authorized capital of a company, a resolution has to be passed at a board meeting and then at a general meeting. A form has to be filed with the Registrar of Companies with the necessary fees, along with the amended memorandum of association.
No, it is not necessary to issue new shares when the authorized capital is increased. The company can issue new shares at a later date when the need arises.
The documents must be filed with the Registrar of Companies within 30 days from the date of passing the resolution to increase the authorized capital.
The fees for increasing authorized capital depend on the amount of authorized capital being increased. The fees can be found on the website of the Ministry of Corporate Affairs.
Increasing authorized capital does not have any direct effect on the company’s shareholders. It only gives the company the ability to issue more shares if needed in the future.
Yes, authorized capital can be decreased by passing a special resolution at a general meeting and filing the necessary documents with the Registrar of Companies.
No, it is not necessary to issue new shares when the authorized capital is decreased.
The documents must be filed with the Registrar of Companies within 30 days from the date of passing the resolution to decrease the authorized capital.
The fees for decreasing authorized capital depend on the amount of authorized capital being decreased. The fees can be found on the website of the Ministry of Corporate Affairs.
Yes, a company can increase its authorized capital multiple times as per the provisions of the Companies Act.
No, the authorized capital of a company can only be increased with the consent of the shareholders.
No, there is no minimum authorized capital requirement for companies in India.
Yes, a private limited company can increase its authorized capital beyond INR 1 crore with the consent of its shareholders.
Authorized capital is the maximum amount of capital that a company is authorized to issue to its shareholders, whereas paid-up capital is the actual amount of capital that has been issued and fully paid for by the shareholders.
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