Authorized Capital Increase

Authorised share capital increase refers to raising the maximum amount of share capital that a company is legally permitted to issue to its shareholders. This is typically achieved through an amendment to the company’s Memorandum of Association (MOA)

By increasing the authorised share capital, a company expands its capacity to issue additional shares, enabling it to raise funds from existing or new shareholders. This process is often undertaken to support business expansion, finance new projects, or meet evolving financial needs.

During the formation of a Private Limited Company, the initial authorised and paid-up capital levels are established in the company’s Memorandum of Association (MOA). This sets the maximum amount of share capital that the company is allowed to issue to its shareholders. Should the company aim to exceed this predetermined cap by issuing additional shares, it necessitates an amendment to the MOA to raise the authorised capital threshold, thereby accommodating the issuance of new shares beyond the original limit.

Specific documentation must be submitted within 30 days following shareholder approval to formalise an increase in authorised share capital. For private companies, this involves submitting the resolution through e-form SH-7, while the submission of e-form MGT-14 is not required. Ensure the following documents are prepared for filing:

  • The latest amended version of the Memorandum of Association (MoA)
  • The most recent or revised copy of the Articles of Association (AoA), particularly in cases where the AoA has been altered
  • A copy of the ordinary resolution approved by the company’s shareholders