{"id":17356,"date":"2021-10-11T15:43:02","date_gmt":"2021-10-11T10:13:02","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=17356"},"modified":"2024-01-06T16:07:47","modified_gmt":"2024-01-06T10:37:47","slug":"increase-in-authorized-share-capital","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/","title":{"rendered":"Overview on Increase in Authorized Share Capital"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d720dd1dc32\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d720dd1dc32\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Increase_in_Authorized_Share_Capital\" title=\"Increase in Authorized Share Capital\">Increase in Authorized Share Capital<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Brief_Introduction\" title=\"Brief Introduction\">Brief Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Meaning_of_Authorized_Capital\" title=\"Meaning of Authorized Capital\">Meaning of Authorized Capital<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Alteration\" title=\"Alteration\">Alteration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Need_for_Alteration\" title=\"Need for Alteration\">Need for Alteration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Mode_to_Alteration\" title=\"Mode\u00a0to Alteration\">Mode\u00a0to Alteration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Procedure_for_Alteration\" title=\"Procedure for Alteration\">Procedure for Alteration<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Verification_of_AOA\" title=\"Verification of AOA\">Verification of AOA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Conduct_of_Board_Meeting\" title=\"Conduct of Board Meeting\">Conduct of Board Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Conduct_of_Extra-Ordinary_General_Meeting\" title=\"Conduct of Extra-Ordinary General Meeting\">Conduct of Extra-Ordinary General Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Filing_of_ROC_Forms\" title=\"Filing of ROC Forms\">Filing of ROC Forms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Filing_of_E-form_MGT-14\" title=\"Filing of E-form MGT-14\">Filing of E-form MGT-14<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Allotment_of_Shares\" title=\"Allotment of Shares\">Allotment of Shares<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/increase-in-authorized-share-capital\/#Complete_Overview_on_Share_Capital_or_Debenture\" title=\"Complete Overview on Share Capital or Debenture \">Complete Overview on Share Capital or Debenture <\/a><\/li><\/ul><\/nav><\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-17358\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Increase-in-Authorized-Share-Capital.jpg\" alt=\"Increase-in-Authorized-Share-Capital\" width=\"936\" height=\"524\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Increase_in_Authorized_Share_Capital\"><\/span><span style=\"color: #000080;\"><strong>Increase in Authorized Share Capital<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Brief_Introduction\"><\/span><strong><span style=\"color: #000080;\">Brief Introduction<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Promoters of\u00a0a corporation\u00a0decide the capital investments at the incorporation stage.\u00a0Because the\u00a0business grows,\u00a0the corporate\u00a0expands its operation. It is commonly seen that the capital contribution exceeds the limit of authorized capital. Now, in order to facilitate the same, the management or the Board of Directors, look for the increase in authorized capital of their company.<\/li>\n<li>The authorized capital\u00a0is that the\u00a0amount of capital\u00a0that\u00a0companies have\u00a0the right\u00a0to issue shares to the shareholders.<\/li>\n<li>Let us check up on the authorized capital of the corporate, increase in authorized capital of company, the method to change the authorized capital, and filing of form to ROC.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Meaning_of_Authorized_Capital\"><\/span><span style=\"color: #000080;\"><strong>Meaning of Authorized Capital<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>An authorized capital\u00a0is the amount of\u00a0capital which\u00a0is permitted\u00a0within the\u00a0Memorandum of Association (MOA) to be\u00a0the maximum\u00a0amount of share capital of the said company.<\/li>\n<li>This has also been defined under Section 2(8) of\u00a0the companies\u00a0Act. So,\u00a0we can\u00a0say that\u00a0a corporation\u00a0can take all the steps for increasing the authorized share capital limit\u00a0so as\u00a0to issue more shares, but it cannot issue shares which are exceeding the authorized limit.<\/li>\n<li>It is mandatory for\u00a0an organization\u00a0to increase\u00a0the authorized share capital\u00a0given that\u00a0authorization under AOA or after member approval in ordinary resolution in EGM.<\/li>\n<li>Increase in Authorized Capital. The authorized capital is the total worth of the shares or value of shares the corporate can issue. it&#8217;s important for the corporate to extend the share capital before they issue the new share and also increase the paid-up capital.<\/li>\n<li>Moreover, the paid-up capital is that the total value of the shares the corporate has already issued. Furthermore, the paid-up capital shouldn&#8217;t exceed the authorized capital. The new shareholder is inducted by increasing the authorized share capital, issuance of recent shares, and transfer of existing shares.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Alteration\"><\/span><span style=\"color: #000080;\"><strong>Alteration<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Alteration of authorized share capital means\u00a0a rise\u00a0in authorized capital of company, consolidation or division or sub-division of shares, conversion of paid-up shares into a stock or\u00a0the other way around, or lastly cancellation of unsubscribed shares.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Need_for_Alteration\"><\/span><span style=\"color: #000080;\"><strong>Need for Alteration<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The main reason for the alteration of the authorized share capital of\u00a0a corporation\u00a0is\u00a0to extend\u00a0the share capital\u00a0in order that\u00a0the corporate\u00a0receives more capital for growth. Since we already discussed that authorized share capital\u00a0is that the\u00a0maximum amount of share capital of\u00a0the corporate, so\u00a0one among\u00a0the most\u00a0fundamental reasons\u00a0to change\u00a0share capital is for increasing the capital of\u00a0the corporate\u00a0for its growth.<\/li>\n<li>One variety of alteration is that the sub-division of shares. The sub-division increases the liquidity of shares within the market and increases the number of small shareholders within the market.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Mode_to_Alteration\"><\/span><span style=\"color: #000080;\"><strong>Mode\u00a0to Alteration<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Companies can alter the authorized share capital by alteration of the capital clause\u00a0within the\u00a0MOA. Section 13 of the provides that one can alter the share capital\u00a0in line with\u00a0section 61 of the Act.<\/p>\n<ul>\n<li>Companies Act, 2013 in section 61 talks about\u00a0the facility\u00a0of the\u00a0limited company\u00a0to alter\u00a0the share capital. Furthermore, section 61\u00a0is merely\u00a0talking about\u00a0the sort\u00a0of alteration of authorized share capital in limited companies\u00a0starting from\u00a0the issued capital or paid-up or un-paid capital, etc.<\/li>\n<li>The first step towards alteration or increase in authorized capital of company is\u00a0to test\u00a0whether\u00a0the corporate\u00a0can alter shares under AOA. In the case of\u00a0an unlimited\u00a0company, the alteration of share capital\u00a0is often\u00a0complete under section 65. Section 65 of\u00a0the companies\u00a0Act deals with the reserve of the share capital. On conversion to a\u00a0company.<\/li>\n<li>Before alteration of share capital, the unlimited company\u00a0has got to\u00a0convert itself\u00a0so\u00a0alter the share capital\u00a0within the\u00a0following ways-<\/li>\n<li>By increasing the nominal amount of share capital but it can\u2019t be called up except\u00a0just in case\u00a0of\u00a0winding up\u00a0of\u00a0the corporate. So,\u00a0we are able to\u00a0say that company can increase the\u00a0face value\u00a0of\u00a0the existing\u00a0share to increasing the share capital.<\/li>\n<li>The company can reserve the uncalled share capital for winding up of the corporate.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Procedure_for_Alteration\"><\/span><span style=\"color: #000080;\"><strong>Procedure for Alteration<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Verification_of_AOA\"><\/span><span style=\"color: #000080;\"><strong>Verification of AOA<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ol>\n<ul>\n<li>The AOA or Article of Association\u00a0could be a\u00a0document having\u00a0the principles\u00a0and regulations of\u00a0the corporate. Before\u00a0there&#8217;s\u00a0a rise\u00a0in authorized capital of company,\u00a0it&#8217;s\u00a0necessary to verify the contents of the Article of Association.<\/li>\n<li>Verification\u00a0is necessary\u00a0to make sure\u00a0that\u00a0they need\u00a0the supply\u00a0of alteration or increase of authorized share capital. If\u00a0the availability\u00a0is there, the alteration\u00a0is simple\u00a0and straightforward.<\/li>\n<li>But if\u00a0the corporate\u00a0doesn&#8217;t\u00a0have\u00a0the supply\u00a0for\u00a0the rise\u00a0in authorized share capital, then\u00a0they need\u00a0to amend the AOA.\u00a0the corporate\u00a0can proceed with alteration\u00a0only\u00a0the alteration is complete.<\/li>\n<li>There\u00a0will be\u00a0a rise\u00a0within the\u00a0authorized share capital by passing resolutions either\u00a0within the\u00a0meeting\u00a0or through circulation.<\/li>\n<\/ul>\n<ol start=\"2\">\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Conduct_of_Board_Meeting\"><\/span><span style=\"color: #000080;\">Conduct of Board Meeting<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ol>\n<ul>\n<li>It is mandatory to send notice of\u00a0meeting\u00a0to the director\u00a0a minimum of\u00a07 days\u00a0ahead\u00a0for increasing the authorized capital of\u00a0the corporate.\u00a0the businesses\u00a0need the approval of the board of directors for increasing the capital.<\/li>\n<li>Once the approval is complete, the board decides to conduct\u00a0the final\u00a0meeting. This meeting\u00a0is critical\u00a0for the approval of shareholders for alteration or increase\u00a0within the\u00a0authorized share capital.<\/li>\n<li>\u00a0it&#8217;s\u00a0also important in terms of amendments to the MOA. Notice of general meeting also has an explanatory statement\u00a0consistent with\u00a0section 102.<\/li>\n<li>Lastly,\u00a0the corporate\u00a0passes a board resolution for the extraordinary general meeting and issues notice under section 101. Under this, the altered clause on the authorized share capital in MOA\u00a0may be\u00a0shown for approval by passing\u00a0the normal\u00a0resolution.<\/li>\n<\/ul>\n<ol start=\"3\">\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Conduct_of_Extra-Ordinary_General_Meeting\"><\/span><span style=\"color: #000080;\">Conduct of Extra-Ordinary General Meeting<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ol>\n<ul>\n<li>The directors, shareholders, and auditors receive the notice of the extraordinary general meeting or EGM. This notice\u00a0isn&#8217;t\u00a0given\u00a0but\u00a021 days\u00a0before\u00a0the date of EGM. A shorter period\u00a0is additionally\u00a0allowed if 95% of the members vote for it at the meeting.<\/li>\n<li>This consent\u00a0will be\u00a0either in writing or electronic mode.<\/li>\n<li>The notice has the date, day time and place of the EGM. Once the meeting starts, the matter\u00a0referring to\u00a0the rise\u00a0in authorized capital of company is put forth.<\/li>\n<li>Then the voting takes place and thereafter the resolution\u00a0is additionally\u00a0passed\u00a0together with\u00a0an explanatory statement. The approval for increasing the authorized capital should be in ordinary resolution.<\/li>\n<\/ul>\n<ol start=\"4\">\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Filing_of_ROC_Forms\"><\/span><a href=\"https:\/\/www.caindelhiindia.com\/blog\/key-points-on-annual-filings-to-roc\/\"><span style=\"color: #000080;\">Filing of ROC Forms<\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ol>\n<ul>\n<li>If the AOA of\u00a0the corporate\u00a0already authorizes\u00a0a rise, then\u00a0they have\u00a0to submit Form SH-7 under section 64 of\u00a0the companies\u00a0Act, 2013 within a span of 30 days of alteration. Along with Form SH-7,\u00a0the corporate\u00a0has to\u00a0submit\u00a0actuality\u00a0certified copy of the resolution altering the share capital, Altered MOA and lastly, if the change is\u00a0thanks to\u00a0the order of the Central government of NCLT, then such order also\u00a0has to\u00a0run.<\/li>\n<li>After this, the Registrar approves the filing and increase in authorized capital of company. the new updated share capital\u00a0is going to be\u00a0shown on the official MCA Portal.<\/li>\n<li>The company\u00a0needs to\u00a0file e-form SH-7 and MGT-14(if applicable) within 30 days of resolution\u00a0together with\u00a0the prescribed fees.<\/li>\n<\/ul>\n<ol start=\"5\">\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Filing_of_E-form_MGT-14\"><\/span><span style=\"color: #000080;\">Filing of E-form MGT-14<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ol>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-17366\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Form-INC-24-296x300.png\" alt=\"ROC Form-INC-24\" width=\"973\" height=\"986\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Form-INC-24-296x300.png 296w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Form-INC-24-768x777.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Form-INC-24-800x810.png 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Form-INC-24.png 832w\" sizes=\"(max-width: 973px) 100vw, 973px\" \/><\/p>\n<ul>\n<li>This form has\u00a0the main points\u00a0of\u00a0the corporate,\u00a0the most\u00a0purpose of\u00a0the corporate, date of notice, resolution, and other details about the resolution and digital signatures and DIN.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Along with e-form MGT-14,\u00a0the corporate\u00a0must\u00a0submit\u00a0the subsequent\u00a0documents-<\/strong><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-17368\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Documents-Required-for-E-form-MGT-14-1024x768-1-300x225.png\" alt=\"Documents-Required-for-E-form-MGT-14\" width=\"827\" height=\"621\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Documents-Required-for-E-form-MGT-14-1024x768-1-300x225.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Documents-Required-for-E-form-MGT-14-1024x768-1-768x576.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Documents-Required-for-E-form-MGT-14-1024x768-1-800x600.png 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/Documents-Required-for-E-form-MGT-14-1024x768-1.png 1024w\" sizes=\"(max-width: 827px) 100vw, 827px\" \/><\/p>\n<ul>\n<li>The notice of extraordinary general meeting together with the explanatory statement.<\/li>\n<li>Certified copy of the resolution is given in EGM.<\/li>\n<li>New copy of the MOA and AOA.<\/li>\n<li>E-Form SH \u2013 7<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>E-form SH-7 states\u00a0the main points\u00a0of\u00a0the rise\u00a0in authorized capital of company.\u00a0this way\u00a0is filed within 30 days of resolution.<\/strong><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-17370\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/E-form-SH-7-300x171.jpg\" alt=\"E-form SH-7\" width=\"991\" height=\"565\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/E-form-SH-7-300x171.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/E-form-SH-7-768x437.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/E-form-SH-7-800x455.jpg 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/E-form-SH-7.jpg 1024w\" sizes=\"(max-width: 991px) 100vw, 991px\" \/><\/p>\n<ul>\n<li>This form has details of\u00a0the corporate,\u00a0sort of\u00a0resolution\u00a0together with\u00a0<a href=\"https:\/\/carajput.com\/blog\/what-is-process-of-cancelation-approved-srn-in-mca\/\"><span style=\"color: #0000ff;\">SRN<\/span><\/a>, date of the meeting, details about the authorized share capital, digital signature, and\u00a0taxation.<\/li>\n<li>The company must attach a duplicate of the resolution, new MOA and AOA, and other optional attachments if any.<\/li>\n<\/ul>\n<ol start=\"6\">\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Allotment_of_Shares\"><\/span><strong><span style=\"color: #000080;\">Allotment of Shares<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ol>\n<p>After the corporate increases the authorized capital, there is a rise in paid-up share capital by issuing fresh equity shares.<\/p>\n<p><span style=\"color: #000080;\"><strong>Penal Provisions<\/strong><\/span><\/p>\n<ul>\n<li>Section 61 and 65 don\u2019t\u00a0discuss\u00a0the penalty, the act states about the penalty in section 450.\u00a0just in case\u00a0of non-compliance with\u00a0the rules,\u00a0the corporate\u00a0and therefore the\u00a0officers in default\u00a0need to\u00a0pay Rs. 10,000.<\/li>\n<li>On continuous default, the party\u00a0needs to\u00a0pay Rs. 1000 per day till the default is rectified.<\/li>\n<li>If the corporate fails to submit SH-7 within 30 days, then Rs. 1000 fine per day is there till the default continues or Rs. 25 Lakh whichever is a smaller amount.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-24239\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/MOA.jpg\" alt=\"Change in AOA and MOA\" width=\"995\" height=\"913\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/MOA.jpg 995w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/MOA-300x275.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/MOA-768x705.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/10\/MOA-800x734.jpg 800w\" sizes=\"(max-width: 995px) 100vw, 995px\" \/><\/p>\n<p><span style=\"color: #000080;\"><strong>Conclusion<\/strong><\/span><\/p>\n<ul>\n<li>Companies often look to expand their operations, size and structure. For this,\u00a0they have\u00a0funds by increasing the authorized capital of\u00a0the corporate. Sometimes this amount surpasses the authorized capital.<\/li>\n<li>Hence the authorized capital\u00a0is that the\u00a0maximum amount of capital\u00a0that\u00a0the corporate\u00a0has\u00a0the freedom\u00a0to issue shares.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Complete_Overview_on_Share_Capital_or_Debenture\"><\/span><a href=\"https:\/\/carajput.com\/archives\/complete-overview-on-share-capital-or-debenture.pdf\"><span style=\"color: #000080;\"><strong>Complete Overview on Share Capital or Debenture <\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Increase in Authorized Share Capital Brief Introduction Promoters of\u00a0a corporation\u00a0decide the capital investments at the incorporation stage.\u00a0Because the\u00a0business grows,\u00a0the corporate\u00a0expands its operation. It is commonly seen that the capital contribution exceeds the limit of authorized capital. Now, in order to facilitate the same, the management or the Board of Directors, look for the increase in &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/17356"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=17356"}],"version-history":[{"count":6,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/17356\/revisions"}],"predecessor-version":[{"id":26010,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/17356\/revisions\/26010"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=17356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=17356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=17356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}