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The maximum number of shares that a private corporation may issue depends on its authorised capital. The majority of start-ups start with the minimal permitted capital of Rs. 1 lakh, which is inadequate as the organization expands. The capital clause of the Memorandum of Association is updated by the board issuing a special resolution in order to issue additional shares or increase the Authorised Capital.
A corporation may only increase its share capital over the amount specified in its MOA (Memorandum of Association) provided it has the necessary authorization. As a result, increasing authorised capital has a cumulative effect on the total share capital of the company.
The overall net worth of the corporation likewise rises with the increase in share capital. This improves the company's ability to borrow money even more.
The paperwork must be submitted to the MCA within 30 days after receiving board approval for the share capital increase (Ministry of Corporate Affairs). A notice of increase is filed in SH-7, and the resolution passed is announced in MGT-14.
A copy of a DSC from any authorised director of the company
A copy of the most recent or amended version of the MoA.
A copy of the updated or modified AoA
A copy of the incorporation certificate for the company.
A duplicate of the business's PAN card.
Liquidation, to put it simply, is the procedure started by a firm to wind down its operations. Due to a number of factors, including an unwillingness to carry on with business as usual, insolvency, and others, the firm may elect to dissolve. Liquidation of a corporation, as the name suggests, refers to the sale of the company's assets. The corporation may start the liquidation process and liquidate its assets to pay debts and commitments.
In the event that a business is liquidated owing to bankruptcy, the liquidator may sell the company's assets to satisfy all outstanding debts. Following payment to the creditors, any residual funds are given to the company's shareholders.
Authorized capital is the maximum amount of share capital that a company is authorized to issue to shareholders as per its Memorandum of Association.
Increasing authorized capital allows a company to raise additional funds by issuing more shares without changing the existing shareholders' rights.
The process involves passing a special resolution, updating the Memorandum and Articles of Association, and filing Form SH-7 with the Registrar of Companies.
Yes, there are fees associated with filing the necessary forms and updating the Memorandum and Articles of Association, which may vary based on the increase amount.
The entire process can take around 7 to 15 business days, depending on the promptness of the filings and the approval from the Registrar of Companies.