Authorized capital is the maximum amount of share capital that a company is allowed to issue to its shareholders. Increasing authorized capital enables a company to issue more shares and raise additional funds. At Global Taxman, we provide seamless support to help you increase your authorized capital efficiently and compliantly.
What is Authorized Capital?
Authorized capital, also known as registered capital, represents the limit up to which a company can issue shares to its shareholders. The company can increase this limit by amending its Memorandum of Association (MoA) and obtaining regulatory approvals.
Benefits of Increasing Authorized Capital
Allows the company to issue additional shares to raise capital.
Supports business expansion and new investment opportunities.
Strengthens the company’s financial position.
Prepares the company for future funding requirements.
Step-by-Step Process
Check Articles of Association (AoA): Ensure the company’s AoA permits an increase in authorized capital. If not, amend the AoA first.
Board Resolution: Pass a resolution in a board meeting to propose the increase in authorized capital.
Shareholders’ Approval: Conduct an Extraordinary General Meeting (EGM) to obtain shareholders’ approval via a special resolution.
File ROC Forms: File Form SH-7 and the amended MoA with the Registrar of Companies (RoC).
Pay Stamp Duty and Fees: Pay the applicable stamp duty and RoC fees based on the increase in authorized capital.
Approval from RoC: Once approved, the increase in authorized capital is updated in the company’s records.
Documents Required
Certified copy of the Board Resolution.
Notice and minutes of the Extraordinary General Meeting (EGM).
Amended Memorandum of Association (MoA).
Form SH-7 filed with the RoC.
Payment receipt for stamp duty and RoC fees.
Why Choose Global Taxman?
Expert Guidance: We ensure compliance with all legal procedures and requirements.
Timely Execution: Our team helps complete the process quickly and efficiently.
End-to-End Support: From documentation to RoC approvals, we handle everything.
Transparent Pricing: Clear and affordable pricing with no hidden costs.
Frequently Asked Questions (FAQs)
What is the minimum authorized capital for a company? The minimum authorized capital varies by jurisdiction, but in India, it is typically ₹1 lakh for private companies.
Is shareholder approval necessary? Yes, shareholder approval via a special resolution in an EGM is mandatory to increase authorized capital.
How long does the process take? The process typically takes 7–15 working days, depending on RoC approvals.
Can the authorized capital be decreased? No, the authorized capital cannot be decreased once it has been increased.
