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INCREASE IN CAPITAL – MOA/AOA ALTERATION

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If you want to expand your business by infusion of more funds then you are required to increase the capital in Company with a process of increase in Authorised Capital and Paid-up Capital.

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Q. WHAT IS INCREASE IN CAPITAL?

If you want to expand your business by infusion of more funds then you are required to increase the capital in Company with a process of increase in Authorised Capital and Paid-up Capital where first you have to increase your authorised capital of company, then only you may increase your company’s paid-up capital.

Q. WHAT IS THE PROCESS TO INCREASE THE AUTHORISED CAPITAL ?

  • Authorisation must in the Article of Association(AOA)
  • Calling of Board Meeting of Board of Directors (BOD)
  • Holding of Extraordinary General Meeting (EGM)
  • Alteration in Memorandum of Association(MOA)
  • Filing of vaious forms with ROC.

Q. WHAT IS THE PROCESS TO INCREASE THE PAID-UP CAPITAL ?

  • It is required to conduct a Board Meeting of the company and pass the board resolution for issuing the Paid-up Share Capital to either existing shareholders or other than existing members.
  • It is required to provide Notice as per Section 101 of Companies Act,2013 to the members of the company to hold the General Meeting and pass a resolution to issue the Paid-up Share Capital.
  • Submit the relevant Form to MCA (Ministry of Corporate Affairs) and Submit to ROC ( Registrar of the company) as well of the relevant resolution passed for increasing Paid-up Share Capital.
  • Within the period of 60 days issue and allot the shares to the Shareholders of the company and depositing of such amount as prescribed.
  • After Allotment of Shares issue the Share Certificate to the shareholders within 2 months after allotment.

Paid-up Share Capital should be not more than the Authorised Share Capital as it is included in the capital clause in the MOA (Memorandum of Association).

Q. WHAT IS AUTHORISED SHARE CAPITAL ?

Authorised Share Capital is the share capital that the company can raise the maximum limit amount which is issued as shares to its Shareholders. This Amount has been referred to in the Capital Clause of the Company MOA (Memorandum of Association). It can also be altered with the consent and approval of the shareholders.

Q. WHAT IS PAID-UP CAPITAL ?

Paid-up Share Capital, also known as paid-in capital or contributed capital is the amount received from the shareholders by the company in exchange for shares of stock. The shareholders receive shares in the company Share Capital payments and it cannot be more than the Authorised Share Capital of the Company.

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