Every company while getting incorporated is required to mention the specified amount of authorized share capital. The authorized capital share capital is the maximum amount of capital that a company can raise from the public at large or from other sources. A company is not empowered to issue any capital beyond the limit of authorized capital. However, the amount of authorized can be changed by following a specific procedure and paying the required amount of fees. Below we have outlined the steps involved in the procedure of increasing the Authorized share capital of the company.
Verifying the Article of Association – The first thing to be done in the procedure of altering the authorized share capital of the company is to verify whether the article of association contains such provision or not. However, in case such provision is not there in the article of association then the special resolution must be passed by the company to alter the AOA.
Conducting the board meeting – In order to increase the authorized share capital of the company a board is required to be conducted where a ordinary resolution will be passed for increasing the authorized share capital by giving a notice of not less than 7 days. Also , the meetings can be convened in order to decide the date, time, and place for the annual general meeting to be conducted for the purpose of alteration in AOA if required.
Filing MGT 14 form – A general meeting must be conducted by giving the prior notice of not less than 21 days. The resolution must be passed at the meeting to the article of association and the form MGT 14 shall be filed within 30 days of passing the special resolution. This form is only required to be filed if the article of association is altered.
Filing ROC forms- In case the special resolution is not required to be passed then the form SH-7 is required to file with the registry within 30 days of filing the ordinary resolution. Along with the form the required fees the following documents including the notice related to the EGM, the copy or ordinary resolution and the revised MOA should be filed.
After this procedure alterations is followed you can edit the authorized share capital of the company.