Increase Authorized Capital

The authorized share capital determines the maximum number of shares that a private business can issue. According to the 2013 New Companies Act, there is no minimum requirement for increasing the capital. To issue additional shares or raise the authorized share capital, the board updates the capital clause of the Memorandum of Association by approving an ordinary resolution.

The increase in authorized share capital amount may vary from one business to another and can be modified, but only with the consent of shareholders. For instance, if a company has an authorized capital of ₹2 lakhs, it can issue shares up to ₹2 lakhs. However, this allowed capital can be adjusted as needed. If a company currently has ₹1 lakh in allowed capital, but an investor wants to invest ₹1 crore, the company can increase its authorized capital to ₹1 crore. The flexibility to adjust the authorized share capital is essential for company registration and is governed by the provisions mentioned above.