In relation to a company, Authorized Capital is the amount mentioned in the capital clause of the Memorandum of Association of the company. The authorized capital of a Company determines the number of shares a Company can issue to its shareholders. To the extent of the amount specified in a capital clause, the company can raise capital. If the company wants more capital then the capital clause has to be amended by the members by passing a special resolution at a general meeting. An increase in the authorized capital might as well be required for issuing new shares and/or infusing more capital into the Company.
Guided Requirements from your Company’s End
Documented AoA of the Company
The company’s AoA must have a clause for an increase in capital in the future. If not, the organization is required to modify the Articles as per Section 14 of the Companies Act, 2013.
Board Meeting
A Board Meeting should be organized to approve the Increase in Authorized Capital from the Board of Directors.
Shareholders’ Approval
Following the Board Meeting, the company’s shareholders should be addressed to get approval on the Increase in Authorized Capital
Adaptation in Company’s MoA
After getting approval from the Board and the Shareholders, the Company’s MoA should be modified for increasing the Authorized Capital
Acquaint with ROC
The alteration in the company’s MoA, AoA, increase in the Authorized Capital, should be informed to the Registrar of Companies (ROC) and the Ministry of Corporate Affairs (MCA)