Increased Shared capital
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Issuance of the shares of a company is dependent on its Authorized Shared Capital. Increase in shared capital will help in issuance of new shared and raising more capital to grow the business.
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Increased Shared Capital
According to Section 2(8) of the Companies Act, 2013, the capital that is authorized by the memorandum of a company and is the maximum amount of share capital of the company is called Authorised Capital. During the incorporation of a company, the amount of capital that is to be invested is the most important decision. The majority of start-ups choose minimum authorized capital of Rs. 1 lakh as a beginning investment.
Advantages of Increased Shared Capital
- Increased Borrowing Capacity
After increasing the hared capital the total net worth of the company also enhances. This helps the company to enhance the borrowing capacity. - Increase in Shared Capital
Shared capital of a company can only be raised till its prescribed limit inn the MOA. This will help to increase the shared capital to raise more capital.
Steps involved in Increasing Shared Capital
- Check the Article of Association of the Company
- Authorized Share Capital can be increased in two ways
- By Passing of Resolution in Board Meeting
- By Passing of Resolution through Circulation
- Convene General Meeting [Section 96, 100 and SS-2]
- File Form SH-7 with the ROC
- Payment of e-Stamp Duty
- Alteration in MOA and AOA
Documents Required
- Digital Signature Certificate
- Memorandum of Association
- Articles of Association
- Certificate of Incorporation
- PAN card
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