The **authorized capital** represents the **maximum number of shares** a company is allowed to issue. This limit often needs to be raised for future expansion, capital infusion, or growth during its business activities.
To issue additional shares beyond the current authorized limit, specific procedures must be followed. This typically involves filing documents with the **Registrar of Companies (ROC)** and organizing both a **Board Meeting** and a **General Meeting** of shareholders.
Importance:
Despite its relatively small scope, increasing authorized capital is a pivotal stage in company management, as it enables the allocation of new shares, potentially impacting the company's ownership structure and capitalization.
Complying with legal requirements when increasing authorized capital is essential to maintain **lawful operations** and uphold **strong corporate governance practices**. Seeking expert advice and assistance is crucial to ensure the proper implementation of all necessary steps in accordance with applicable laws and regulations.
Sujata Associates is one of the leading legal service providers in Kolkata. An increase in authorized capital can be required at any time for a company, and we are here to assist you even in the wake of the **Covid-19 pandemic**. Get in touch with us today for excellent, compliant, and timely services.
Begin the formal process of expanding your company's share issuance limit.
Our team ensures all statutory filings, particularly the **SH-7 form** for Notice of Alteration of Share Capital, are completed accurately and on time with the Registrar of Companies (ROC).
The firm must first determine if the **Articles of Association (AOA)** provides a provision for expanding the capital. If not, the Companies Act of 2013 mandates that the AOA be amended first.
The BOD must meet to approve the increase, and crucially, set up an **Extraordinary General Meeting (EGM)** to get the necessary shareholders' permission. Notice of the EGM, along with an agenda, must be published.
Once the resolution is passed, the **Memorandum of Association (MOA)**'s capital clause must be altered to reflect the new, higher authorized capital limit. This involves statutory filing with the ROC.
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