Authorized Share Capital (also known as Nominal Capital or Registered Capital) is the maximum amount of share capital that a company is authorized to issue to its shareholders as per its Memorandum of Association (MOA).
Submit to get Change in Authorized Share Capital
It will increase the issuing limit of capital
It also attracts investor to invest more.
It Improves the creditworthiness of company in market
Change In Authorized Share Capital Service Details
Key Points: -
Maximum Limit: It represents maximum amount of capital a company can issue to shareholders.
Specified in MOA: Authorized capital is mentioned in MOA and can be increased with approval of shareholder and board committee and filing of some regulatory compliances.
Breakdown: It is divided into specific number of shares and breakdown will be shown in MOA also.
Process for Increasing the Authorized Share Capital: -
It includes several steps i.e.,
Firstly, we have to pass various resolution along with the explanatory notes.
Then we have to file PAS- 3 for increasing paid up capital.
Then at last MGT- 14 need to be file for increasing capital and filing of the resolutions.
At last ROC will approve the forms and provide the approval letter for same.
Now Let’s discuss in detail what is included in every step and how we proceed with that
Firstly, company has to conduct board meeting for increasing the paid-up capital and also dispatch out the notice of Extraordinary General Meeting (EGM) to the shareholders.
Then EGM will conduct, and shareholder will grant approval for the same.
Then all the resolution passed at both the meeting is required along with the explanatory notes.
Then after all these things the first step is to file the SH- 7 for increasing paid up capital of company and we will attach resolution in that and file the same by attesting DSC of authorized director for signing of the form.
Now we have to file another form i.e., MGT 14 on MCA portal and pay the fees along with that.
Then ROC will take some days to approval after we receive the approval letter.
Documents Deliverable: -
Form SH-7 along with challan.
Form MGT-14 along with challan.
Time taken under this work will be 2 days and ROC will approve the same in 3-4 working days.
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Eligibility
If company wants to increase paid up capital and it exceed the authorized, then there is need of Authorized capital to be increase.
Company may also increase its authorized share capital when they have to meet any regulatory requirement.
Documents Required for Change in Authorized Share Capital
Now let’s Discuss about the documents need for increasing Paid-up Capital of a company: -
All the resolution passed at both the meting i.e., EGM and BM along with the explanatory notes.
Digital signature certificate of the director authorized for signing.
Memorandum association of the company.
Subscriber sheet stating clearly the proportion of each shareholder that they will hold after increasing the capital.
Benefits Of Getting Change In Authorized Share Capital
Funding Opportunities: It allows a company to raise additional funds by issuing new shares, which can be crucial for expansion, development, and operational needs.
Market Confidence: It will boost the confidence of investors and shareholder in the market.
Improved Creditworthiness: It helps to improves the credit worthiness in the market. Higher authorized share capital helps to enhance credit rating among investors and members.
Increase the limit: - It will increase the issuing limit of capital