COMPANY’S AUTHORISED SHARE CAPITAL BE INCREASED?

Authorised Capital is the capital which is authorised by the Memorandum of Association to be the maximum amount of share capital of the company. A company cannot issue shares beyond the limit of authorised share capital. Following procedures are to be followed while increasing authorised share capital of the company.

1. Check the company’s AOA.

It is necessary to check the AOA to ensure that there is a provision in the Articles of Association related to the increase of the authorised capital before beginning the procedures for doing so. If there is no such provision, then company must first make changes to the AOA of the company.

2. Convene a Board Meeting

To increase the company’s authorised share capital, a Board meeting must be convened and notice along with explanatory statement is given to the director. Board resolutions for increase in Share is to be passed.

3. Extra-Ordinary General Meeting

Conduct the Extraordinary General Meeting (EGM) at the date, time and venue specified in the notice of EGM and get the shareholders’ approval by Ordinary Resolution to increase the authorised capital

4. File ROC forms

Form SH-7

After passing the resolution at the Extraordinary General Meeting, the company must file Form SH-7 within 30 days. The documents listed below must be attached.

Extraordinary General Meeting’s notice
Certified True copy of the ordinary resolution

Fill linked form eMOA

The linked form eMOA is to be filled to alter the capital clause of MOA on account of increase in authorised share capital.

5. Mode of Processing of the form

Form SH-7 is processed in Non-STP (Straight Through Process) mode.

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