India’s Largest Financial Services Platform for Your Business
Office Address
1st Floor, Green Square Market Hisar, Haryana 125001
Send Us Mail
Need Help Call Now? +91-1662-355590
Intrinsicly evisculate emerging cutting edge scenarios redefine future-proof e-markets demand line
Assertively communicate multidisciplinary content through emerging skills for intermandated e-tailers. Rapidiously revolutionize emerging supply for interdependent portals. Monotonectally restore 24/365 leadership for high quality niche markets transform emerging mindshare...
Assertively communicate multidisciplinary content through emerging skills for intermandated e-tailers. Rapidiously revolutionize emerging supply for interdependent portals. Monotonectally restore 24/365 leadership for high quality niche markets transform emerging mindshare...
Assertively communicate multidisciplinary content through emerging skills for intermandated e-tailers. Rapidiously revolutionize emerging supply for interdependent portals. Monotonectally restore 24/365 leadership for high quality niche markets transform emerging mindshare...
Every business requires additional funds to sustain and expand its operations over time. These funds can be needed both on a short-term and long-term basis. While short-term needs can often be met through loans and advances, sustained growth may require a Private Limited Company to increase its authorized capital. This process is governed by the Company Act, necessitating adherence to its regulations.
Authorized capital, as defined by Section 2 (8) of the Companies Act, 2013, represents the maximum amount of share capital a company is authorized to have according to its memorandum. It essentially sets the limit for a company’s business expansion.
Before issuing new equity shares and increasing paid-up capital, a company may need to augment its authorized share capital. This involves expanding the total value of shares the company can issue, distinct from the already issued paid-up capital.
In most cases, this is achieved by:
1. Increasing Authorized Share Capital:This involves amending the Memorandum of Association (MOA) to reflect the higher authorized capital.
2. Transferring Shares: Shares can also be transferred from existing shareholders to new shareholders.
Before proceeding, ensure that the Articles of Association (AOA) contain provisions for increasing authorized share capital. If not, amendments to the AOA are necessary.
A board meeting must be called to obtain approval from the Board of Directors for increasing the authorized share capital.
After obtaining board approval, an Extraordinary General Meeting must be conducted to secure shareholder approval and make necessary changes to the MOA..
Following shareholder approval, file Form SH7 with the Registrar of Companies within 30 days, along with required documents and fees.
With the authorized share capital increased, the company can issue new equity shares to raise the paid-up share capital.
Forms MGT 14 and SH 7 need to be filed within 30 days from passing the resolution.
It should be done before issuing new equity shares.
Private Limited Companies require a minimum of Rs.1 lakh, and public limited companies need Rs.5 lakh.
Many businesses face unnecessary penalties due to late filing of statutory returns. Monitrix.in offers affordable services, leveraging technology to help businesses proactively manage compliance and avoid late fees.
Avail a range of banking services through Monitrix.in, including current account opening, payment gateway setup, and loans from partner banks.
Changing the registered office of a company can have several advantages, depending on the specific circumstances and goals of the business. Here are some potential advantages:
Moving the registered office to a different location may provide strategic advantages, such as being closer to key clients, suppliers, or markets. It can also be beneficial in terms of access to transportation hubs.
If the current location is expensive in terms of rent or other operating costs, relocating the registered office to a more cost-effective area can result in significant savings.
Some jurisdictions offer tax incentives or benefits for businesses located in specific regions. Changing the registered office to a location with favorable tax conditions can lead to reduced tax liabilities.
Companies are required to have their registered office in the jurisdiction where they are registered. If the company has expanded its operations or changed its primary place of business, changing the registered office ensures compliance with legal requirements.
Moving the registered office to a different region or country may provide better access to new markets and business opportunities. This can be particularly relevant for companies looking to expand internationally.
The location of a company’s registered office can influence its corporate image. Moving to a prestigious or well-known business district may enhance the company’s reputation and perception among clients, investors, and partners.
Changing the registered office can have legal implications, and in some cases, it may be done to take advantage of more favorable legal frameworks in a different jurisdiction. This can include corporate governance, regulatory requirements, or legal protections.
A change in the registered office can provide a company with greater flexibility in its operations. For example, it may facilitate the ability to conduct business in different regions or countries.
If a company undergoes significant changes in its business model, clientele, or operations, changing the registered office may align with these shifts and support the overall business strategy.
It’s important to note that changing the registered office involves legal and administrative processes, and companies should carefully consider the implications, seek professional advice, and comply with all legal requirements when making such a decision.
Increasing the authorized capital of a company involves several key points that should be carefully considered and addressed. Here are the key points to keep in mind when planning to increase the authorized capital:
Evaluate the financial needs of the company and determine the reasons for increasing the authorized capital. This could include funding expansion projects, acquisitions, debt repayment, or other business purposes.
Obtain approval from the board of directors through a resolution to increase the authorized capital. The resolution should specify the proposed increase amount and the purpose behind the increase.
Check the company’s articles of association and local regulations to determine whether shareholder approval is required for the increase. If necessary, convene a general meeting of shareholders to obtain approval.
Prepare amended articles of association reflecting the increased authorized capital. Clearly outline the changes made, including the new authorized capital amount and any other relevant details.
Ensure compliance with all regulatory requirements related to the increase in authorized capital. This may involve filing necessary documents with the relevant regulatory authorities or company registration office.
Prepare and submit the required application forms and documents to the regulatory authorities seeking approval for the increase in authorized capital.
Be aware of any filing fees and charges associated with the increase in authorized capital. Budget for these expenses in the financial planning of the company.
Clearly communicate the proposed increase to shareholders, providing information about the reasons behind the decision and its potential impact on the company.
Provide shareholders with relevant documents, such as the amended articles of association and explanatory materials, to help them make informed decisions.
Keep detailed records of the entire process, including board and shareholder resolutions, application filings, and any correspondence with regulatory authorities.
In some jurisdictions, certain documents may require notarization or legalization. Ensure compliance with these requirements.
Check if there are any publication requirements, such as public notices in newspapers, and fulfill these obligations as per local regulations.
Consider the timing of the increase in authorized capital in relation to the company’s overall business strategy and financial planning.
Inform key stakeholders, including creditors, lenders, and business partners, about the increase in authorized capital.
If the company is listed on a stock exchange, notify the exchange about the increase and comply with any listing requirements.
Each of these key points requires careful consideration and attention to detail to ensure a smooth and legally compliant process for increasing the authorized capital of a company. Consulting with legal and financial professionals can be crucial in navigating the complexities associated with such changes.
Increasing the authorized capital of a company is a significant corporate action that involves several procedural and regulatory steps. The exact process may vary depending on the jurisdiction and the company’s articles of association, but here are general steps to guide you through the process:
Check the company’s articles of association and local regulations to determine if shareholder approval is required for the increase. If needed, convene an extraordinary general meeting (EGM) to obtain shareholder approval.
Prepare amended articles of association to reflect the increased authorized capital. Clearly state the changes made, including the new authorized capital amount and any other relevant details.
Understand and comply with the regulatory requirements for increasing authorized capital in the relevant jurisdiction. This may involve filing specific forms and documents with the local company registration office or regulatory authorities.
Complete and submit the necessary application forms and documents to the regulatory authorities, seeking their approval for the increase in authorized capital.
Pay any required filing fees and charges associated with the application for an increase in authorized capital. The amount may vary depending on the jurisdiction.
Clearly communicate the proposed increase to shareholders. Provide them with relevant documents, such as the amended articles of association and an explanation of the reasons behind the increase.
Comply with any publication requirements, such as public notices in newspapers, as mandated by local regulations.
If required by the jurisdiction, notarize or legalize certain documents associated with the increase in authorized capital.
Await and obtain formal approval from the regulatory authorities for the increase in authorized capital.
Once approval is granted, update the company’s Certificate of Incorporation to reflect the new authorized capital.
Seek legal and financial advice throughout the process to ensure compliance with all applicable laws and regulations.
Implement the changes internally, ensuring that all records, documents, and communication materials reflect the updated authorized capital.
It’s essential to consult with legal and financial professionals who are familiar with the local regulations to guide you through the specific requirements and procedures for increasing authorized capital in your jurisdiction.