About Increase in Authorized Capital
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To Existing Promoters
If you are increasing the authorised capital and issuing new shares to existing promoters, a board meeting needs to be called and Form PAS-3 needs to be filed with the Registrar of Companies (RoC), intimating the allotment of shares.
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To New Shareholders
Issuing shares to new shareholders is a complicated procedure, necessitating a valuation report from a chartered accountant.
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Board Meeting
The board meeting is conducted where the board of directors approves to conduct the EGM and a notice regarding the same is issued. The notice, on the behalf of the board, is issued to each and every member/ shareholder of the company regarding EGM where the member/ shareholder will decide through their vote, the special business transaction for which the EGM will take place.
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Extra ordinary general meeting.
After service of the notice, the extraordinary meeting of the members of the board takes place where the members of the company shall have right to vote or not to vote in favour of the increase in the authorised share capital of the company. The consent of the member is accorded regarding the alteration in the memorandum of association of the company. The clause V of the MOA will be altered and will be replaced with the new and amended clause. In the same meeting, one of the board member will be authorised to perform all the obligations in this regard.
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Passing of special resolution.
The company being an artificial person, any decision taken by the company shall be in form of resolution, which may be defined as an agreement or decision made by the director or members of the company. Under company law, the authorized share capital of the company can be increased at the AGM/EGM of the shareholders by passing of the special resolution.
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