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Increase in Authorized & Paidup Capital
Increasing the authorized and paid-up capital of a company involves certain legal procedures and documentation.
Increase in Authorized & Paidup Capital
Increasing the authorized and paid-up capital of a company involves certain legal procedures and documentation. Below is an overview of the content and steps typically involved in increasing the authorized and paid-up capital of a company:
1. Definitions:
- Authorized Capital: It is the maximum amount of capital that a company is allowed to issue to its shareholders. It is mentioned in the company’s Memorandum of Association (MOA).
- Paid-up Capital: It is the portion of the authorized capital that has been issued and fully paid for by the shareholders.
2. Board Meeting:
- The board of directors must convene a meeting to discuss and approve the proposal for increasing the authorized and paid-up capital. A board resolution should be passed to authorize the process.
3. Shareholders’ Approval:
- Depending on the laws of the country and the company’s Articles of Association (AOA), obtaining shareholders’ approval may be necessary. This can be done through an Extraordinary General Meeting (EGM).
3. Shareholders’ Approval:
- Depending on the laws of the country and the company’s Articles of Association (AOA), obtaining shareholders’ approval may be necessary. This can be done through an Extraordinary General Meeting (EGM).
4. Amendment of Memorandum and Articles of Association:
- To increase the authorized capital, the company’s MOA needs to be amended to reflect the new authorized capital amount. This requires filing the necessary forms and documents with the relevant government authority.
5. Filing with Registrar of Companies (ROC):
- Companies are required to file the amended MOA and other required documents with the ROC or the appropriate regulatory authority within the prescribed time.
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