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Increased Authorized Capital

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Increased Authorized Capital

Expand Your Business by Increasing Capital Legally

Every Private Limited Company is registered with a fixed authorized share capital (the maximum value of shares it can issue). If a company wants to raise more funds, issue additional shares, or bring in new investors, it must first increase its authorized share capital by altering its Memorandum of Association (MoA).

This process is governed by the Companies Act, 2013 and requires approval from the company’s shareholders and filing with the Registrar of Companies (RoC).

Why Increase Authorized Share Capital?

  • 💰 Raising Additional Funds – To issue new shares for expansion or working capital.

  • 👥 Bringing in New Investors – Allowing room for equity infusion.

  • 📈 Future-Proofing Business – Preparing for scaling operations.

  • 🔄 Compliance with Investor Requirements – Many investors demand higher capital before investing.

  • 🏢 Strengthening Company Structure – Reflecting growth and stability in financial records.

Step-by-Step Process

  1. Check Articles of Association (AoA):

    • Ensure that AoA allows alteration of authorized capital.

    • If not, amend the AoA by passing a special resolution.

  2. Board Meeting:

    • Call a Board Meeting to propose increase in authorized capital.

    • Approve the agenda and call for an Extraordinary General Meeting (EGM).

  3. Extraordinary General Meeting (EGM):

    • Pass an ordinary resolution to increase authorized share capital.

    • Approve amendment in MoA reflecting new authorized capital.

  4. Filing with RoC:

    • File Form SH-7 with the Registrar of Companies within 30 days of resolution.

    • Attach supporting documents (MoA amendment, resolution copy, etc.).

  5. Approval by RoC:

    • RoC reviews and approves the application.

    • The authorized capital stands increased, enabling issuance of new shares.

Documents Required

  • Certified Copy of Board Resolution

  • Certified Copy of Shareholders’ Resolution (EGM)

  • Altered MoA reflecting new capital clause

  • Altered AoA (if required)

  • Digital Signature Certificate (DSC) of Directors

  • Form SH-7 and filing fees

Benefits of Increasing Authorized Capital

  • ✅ Enables Fundraising – Issue more shares for expansion.

  • ✅ Attracts Investors – Higher capital base looks credible.

  • ✅ Supports Business Growth – Prepares company for long-term scalability.

  • ✅ Legal Compliance – Keeps the company in good standing with MCA.

  • ✅ Flexibility in Capital Structure – Provides room for future share allotments.

Why Choose India Tax Filing for Capital Increase?

  • 📌 Expert Consultation – Assessing required capital structure.

  • 📌 End-to-End Filing – From drafting resolutions to MCA filings.

  • 📌 Error-Free Documentation – Ensuring 100% compliance.

  • 📌 Quick Processing – Timely filing within statutory deadlines.

  • 📌 Affordable Pricing – Transparent charges, no hidden fees.