Increase Authorized Capital

How To Register An Nidhi Company

It's ideal for those businesses looking to start a permanent and a mutual benefit fund, or a mutual benefit company.

We answer all of your Approved Capital questions.

Step 1

We check your MoA and AoA for your allowed capital limit.

Step 2

In both standard and luxury sets, we assist you in completing the whole process.

Step 3

An Overview

Increase Authorized Capital

A private company’s approved capital specifies the maximum number of shares it may sell. The minimum authorised capital for most start-ups is Rs. 1 lakh, which is insufficient as the company expands. The capital provision of the Memorandum of Association is amended by passing a special resolution by the board to issue new shares or increase the Authorised Capital.

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Benefits

Increases the amount of capital in the company
Only authorised capital allows a corporation to increase its share capital above what is specified in its MOA (Memorandum of Association). As a result, increasing approved capital has a cumulative impact on the total share capital of the company.

Borrowing Capacity is Increased
The company’s total net worth grows in tandem with the rise in equity value. This increases the company’s borrowing power even further.

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Documents Required

Documents Required to Increase Authorised Capital

The paperwork must be lodged with the MCA within 30 days of receiving board approval for the share capital raise (Ministry of Corporate Affairs). MGT-14 is notified of the resolution, and SH-7 is notified of the raise.
Signatures in digital format Authentication: a copy of a DSC signed by each of the company’s approved directors
Association Memorandum: A copy of the amended or more recent edition of the Articles of Association of the MoA: A copy of the new or updated AoA Certificate of Incorporation: A copy of the company’s incorporation certificate.
PAN key: A duplicate of the business’s PAN card.

Checklist

To raise Authorised Share Capital, check the terms of the AoA (Articles of Association).
If the AoA does not allow for a raise, the AoA must be changed in accordance with section 14 of the Companies Act 2013.
Call an EOBM (Extraordinary Board Meeting) to amend the Articles of Association and approve the increase in approved share capital.
Give at least seven days’ notice before the conference.