Increase Authorised Share Capital

When an entrepreneur decides to get company registration and settles on the business structure most suited to the purpose of the business and other co-owners, it is essential to decide what the share capital of the company is to be and how can we Increase Authorised Share Capital.

The share capital is that part of a company’s equity which has been raised by issuing shares and selling them to stockholders in exchange for capital (cash or other considerations). In order to maintain financial decorum, the government stipulates that no company can indiscriminately issue shares for the purpose of raising capital. To that effect, authorised share capital is the maximum value of share capital that the company is legally authorised to issue to shareholders.

Our Company Registration package includes the following:

  • DSC for one director and DIN for up to three directors
  • Drafting of MoA & AoA
  • Registration fees and stamp duty
  • Company Incorporation Certificate
Process to Increase Authorised Share Capital

Hence the authorized share capital of the company can be increased at any time, subject to the constraints and clauses dictated by section 61 (read with section 13 and 14) of the Companies Act, 2013.

To remove a Director suo-moto by the Board

A Company has the authority to remove a Director by passing an Ordinary Resolution, given the Director was not appointed by the Central Government or the Tribunal. A Board Meeting will be called by giving seven days’ notice to all the directors. A special notice will go to the directors informing them about the removal of the director. On the day of the Board Meeting, a resolution for the holding of an extraordinary general meeting will be passed along with the resolution for the removal of the director subject to the approval of the shareholders. A general meeting will be held by giving 21 days clear notice. In the meeting, the members will be asked to vote on the matter. If the majority is in favor of the decision, the resolution will be passed. Before the passing of the resolution, an opportunity of being heard will be given to the director. After the passing of the resolution, the same procedure will be followed, and the forms DIR – 11 and DIR – 12 will be filed along with the same attachments of the Board Resolution, Ordinary Resolution. After the filing of the forms, the name of the director will be struck off from the Ministry of Corporate Affairs website.

  • Step 1 - Verifying approval within the Articles of Association

    Section 61 of the Companies Act, 2013, orders that for expanding the Authorised offer capital, approval in Articles of Association is a pre-condition. Hence verifying that the necessary provisions are spelled out within the Articles is a pre-requisite to increasing authorised share capital. In case the Articles do not approve an increase, it is then incumbent to amend them to allow the same before proceeding, as per the provision of Section 14 of the Companies Act, 2013. The Article of Association should be amended by a special resolution.

  • Step 2- Board meeting to notify the incidence of EGM

    A board meeting is called wherein it is decided that an EGM is to be held to discuss and vote on the matter of raising authorised share capital. Once the date, place, and time of the EGM are agreed upon by the Board, a notice for the same is issued to every member/shareholder, director, auditor of the company, who will thereafter vote upon the matter of raising authorised share capital, as per Section 101 of the Companies Act 2013. Moreover, the notice must consist of the voting method that is to be utilized for passing the special resolution to increase the authorised share capital of the company, and the explanatory statement pursuant to Section 102 of the Companies Act is to be enclosed as well.

  • Step 3- Extraordinary General Meeting

    Once notice of the impending EGM has been sent out and the meeting is in session, the matter of increasing authorised share capital is deliberated upon and then voted upon in the manner set forth in the notice for the incidence of the EGM. The Ordinary Resolution under section 61(1)(a) of the Companies Act, 2013, is then passed to increase in authorised share capital of the Company.

  • Step 4- ROC Form documenting

    An important topic for your company registration is of course the costs involved with starting a company in the Netherlands. You need to consider the following fees and costs: Preparation of the notary documents and client identification documents The company registration fee to the chamber of commerce Registration at the local tax authorities Our incorporation fees for opening the company and bank account Our fees for assistance with the VAT number and optional EORI number applications The annual costs involve the accounting services from our firm. You can ask us to provide you with a detailed quote for the services you are looking for. Within a time frame of 30 days of the passing of Ordinary Resolution, Form SH-7 must be filed with the concerned Registrar of Companies (RoC) along with the necessary fees and attachments as prescribed by Section 64. In addition to the altered MoA and AoA, the following attachments are required to be submitted along with e-form SH-7

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