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In relation to a company, Authorized Capital is the amount mentioned in the capital clause of the Memorandum of Association of the company. The authorized capital of a Company determines the number of shares a Company can issue to its shareholders. To the extent of the amount specified in capital clause, the company can raise capital. If the company wants more capital then the capital clause has to be amended by the members by passing a special resolution at a general meeting. An increase in authorized capital might as well be required for issuing new shares and/or infusing more capital into the Company.
We at ebizfiling will make it easy for you to ensure all related compliances in relation to increasing your company’s authorized capital.
Few points to make your
Types of capital:
Authorized share capital
Paid up share capital
Quick processing at ROC
Online filing of application
Widens business scope:
Can invest more in other activities
Increases borrowing capacity
Alteration of clauses:
Capital clause of MOA
Capital clause of AOA
Reason for increase:
Diversification of business
Expansion of business
Types of shares:
A small procedure for your
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What is share capital?
When total capital of a company is divided into shares, is called as share capital. Share capital is the total amount of capital collected from their shareholders for the purpose of achieving the objectives of the company.
What is the difference between authorized capital and paid up capital?
Authorized capital is share capital of such kind where the capital limit is authorized by the Registrar of Companies up to which the shares can be issued to the members or public, whereas paid up share capital is share capital of such kind where the paid portion of the capital is subscribed by the shareholders.
Which form is required to be submitted to ROC for effecting increase in capital ?
Companies Act 2013 prescribes form SH-7 for this purpose. This form is required to be submitted within 30 days from the date of passing resolution, in addition to prescribed fees and other mandatory documents.
Am I required to pay stamp duty? If yes how much ?
Yes, amount of stamp duty to be paid depends upon the increased amount of capital. Stamp duties are state specific. Get in touch with our team to exactly know the amount of stamp duty to be paid in your state.
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