A company upon its incorporation records the foundation upon which it is built – its objectives, founding members and importantly its Increase Authorized Share Capital in its charter documents. The Companies Act, 2013 (Act) defines “authorized capital” or “nominal capital” to mean the maximum amount of share capital, as authorized by the company’s memorandum i.e. the maximum value of shares the company may issue. What this denotes is the maximum value of securities that the company can issue in a legal manner. Now, as the business grows and expands, its natural needs foremost include getting funding. This can be in the nature of either debt or equity. Whenever a company chooses to go for the equity route to raise money, it is then supposed to first check the value of share capital already issued and subscribed against the authorized share capital of the company.
Generally, in all cases of share subscription fresh shares are issued to a new investor in the company and in all such cases where the ceiling of the authorized capital has already been reached, the company has to first undertake an increase in its authorized share capital. If the company wishes to expand its business or want to meet its working capital requirements then for inducting more capital it has to increase its authorized capital first.
At Legit Filings we provide you a hassle free increase of authorized capital process which would be dealt by our professionals within a time frame of 2-3 working days and is subjective to governmental processing time. Our team takes care of the documentation and aids in provide you the realistic estimation of cost.