Increase Authorized Capital of your Company in
3 simple steps, you get
- Documents Review
- Review Articles of Association
- Notice of Board Meeting
- Notice of EGM
- Minutes of EGM
- Form SH-7 Filing
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Introduction
Authorised share capital is the maximum value of shares a company is legally permitted to issue, as specified in its articles of association. This limit can be increased through the approval of shareholders and regulatory authorities, providing the company with flexibility for potential future equity issuance.
Increasing authorised share capital is a strategic move that allows a company to adapt to changing financial needs, attract new investors, and plan for future expansion without immediately issuing new shares. The process involves obtaining shareholder approval and ensuring compliance with legal and regulatory requirements, contributing to the overall financial management and strategic planning of the company. It’s a financial management tool that aligns with a company’s long-term goals and adaptability in a dynamic business environment.
The entire process is managed by Experienced Chartered Accountants and Company Secretaries.
Documents Checklist
We have compiled a list of documents required to Increase Authorized Share Capital of your company:
- Formal notice to convene the EGM with details such as the agenda, date, time, and venue.
- A copy of the ordinary resolution passed at the EGM approving the increase in authorized share capital, specifying the new limit.
- Updated MOA reflecting the approved increase in authorized share capital, to be filed with regulatory authorities.Updated AOA ensures that there is a provision allowing for the increase of authorized share capital.
- File Form SH7 with the Registrar of Companies, this form includes details of the increase in authorized share capital and is accompanied by relevant documents.
process
Process of Increasing Capital
in 3 Simple Steps
At Bright Accounts, we have simplified the entire process of Increasing Authorized Capital into 3 simple steps. This makes your journey smooth, structured and easy.
- Pre-application
- We collect basic information
- Gather required documents
- Drafting & Application
- Verification of Articles of Association (AOA)
- Convening a Board Meeting
- Notice of Extraordinary General Meeting (EGM)
- Approval from Shareholders
- Filing ROC Forms (Form SH7)
- Approval
- Allotment of Shares
- Registrar Approval and MCA Portal Update
benefits
What's Good
about increasing Authorized Share Capital
Flexibility for Growth
One of the primary advantages is the flexibility it provides for future growth and expansion. With a higher authorized share capital, a company can issue additional shares as needed, making it easier to attract new investments and raise funds for strategic initiatives.
Shareholder Confidence
Shareholders may view an increase in authorized capital positively, as it demonstrates management's proactive approach to managing the company's financial structure. It can enhance confidence among existing shareholders regarding the company's ability to seize opportunities and navigate challenges.
Adaptability to Market Changes
Business environments are dynamic, and companies may need to respond to market changes quickly. Having an increased authorized capital allows a company to adapt to evolving financial needs without the necessity of going through the time-consuming process of amending its articles of association.
Strategic Planning
Increasing authorized capital is a strategic move that aligns with a company's long-term planning. It enables the management to have the financial flexibility to pursue strategic initiatives, such as mergers and acquisitions, capital expansions, or research and development projects.
Attracting Investors
A higher authorized capital can make a company more attractive to potential investors. It signals to the market that the company has the capacity to raise additional capital if necessary, which can be appealing to those considering investing in the business.
Enhanced Borrowing Capacity
A higher authorized capital can also positively influence a company's borrowing capacity. Lenders may view a company with a larger authorized capital as having a stronger financial position, potentially improving its ability to secure loans on favorable terms.
What do you get
when you register with our help
Have a query on Increasing Authorized Share Capital?
With the help of Bright Accounts, you not only get the items mentioned on the side, you also get a friend who advices, guides and helps you grow into a great business.
- Review of Documents
- Review Articles of Association
- Notice of Board Meeting
- Notice of Extraordinary General Meeting(EGM)
- Minutes of EGM & Form SH7 filing
- Expert advice you can count on
- Our Bright support throughout the process
Why Bright Accounts
There are many reasons why clients choose Bright Accounts, but from our experience we have listed the four main reason why you should go with us.
Bright & Knowledgeable
Bright Accounts delivers high quality financial services by a team of bright and knowledgeable experts.
Always happy to help
Bright Accounts commit to provide dedicated support and assistance to our clients.
Professional & Approachable
We maintain a high level of professionalism while being easily approachable for our clients.
Easy & Quick
We focus on streamlining and simplifying the complex processes for our clients.
Frequently Asked Questions
Increasing Authorized Capital typically involves amending the company’s Memorandum of Association (MOA) and Articles of Association (AOA) through a special resolution passed by the shareholders. The company then submits the necessary documents to the regulatory authorities for approval.
A company may consider increasing its Authorized Capital to accommodate future growth plans, facilitate fundraising efforts, attract investors, enhance creditworthiness, or comply with regulatory requirements.
The steps involved in increasing Authorized Capital include convening a board meeting to approve the proposal, calling for a shareholders’ meeting to pass a special resolution, filing the necessary forms and documents with the Registrar of Companies (ROC), and obtaining approval from the ROC.
Yes, the process of increasing Authorized Capital is governed by the Companies Act, 2013, and the rules prescribed therein. Companies need to comply with the provisions of the Act, follow the prescribed procedures, and obtain approvals from the regulatory authorities.
- Increasing Authorized Capital does not dilute the ownership stake of existing shareholders. It simply allows the company to issue additional shares in the future if needed, without requiring further approval from shareholders to amend the MOA and AOA.
- The timeline for increasing Authorized Capital depends on various factors, including the company’s compliance record, the efficiency of the regulatory authorities, and the complexity of the transaction. Typically, it may take several weeks to complete the entire process.
Bought Together
There are many reasons why clients choose Bright Accounts, but from our experience we have listed the four main reason why you should go with us.
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