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Change in Authorised Share Capital
A Step Toward Future Expansion

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The Authorized share capital means a capital upto which a company is authorized to issue shares to
existing or new shareholders.
In case, if a company has to issue shares, either to existing shareholders or to new shareholders,
beyond its authorized capital, then in such a scenario it would first be required to increase its
authorized share capital by complying the procedure laid down under the Companies Act, 2013.
As per section 61, 64, and 13 of the Companies Act, 2013 are the governing provisions for increase of
authorized share capital of the Company
As per above sections, Authorized share capital can be increased by passing Ordinary Resolution in
the General Meeting (AGM or EGM) for alteration of its Memorandum of Association. Every such
alteration shall become effective only if registered and recorded by the Registrar of Companies (ROC).
Let’s discuss the procedure of the same in detail…..
Introduction !

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Procedure
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1. Authorization under Article of Association: Increase in
Authorized Share Capital must be authorized under AOA, else it
would first required to be amended accordingly.
2. Convene and hold Board Meeting: A company would be
required to issue notice of Board Meeting under section 173 of
the Companies Act, 2013 to take decision on following Agenda
items:
a) To take approval of Board of Director of the Company for increase in
authorized share capital of the Company.
b) To decide day, date, time and place for holding of EGM for taking
shareholder approval by passing Ordinary Resolution for making
suitable changes under MOA.
c) Draft and approve the notice of EGM along with the explanatory
statement as per section 102 of the Companies Act, 2013
d) Authorize any person (Director/Company Secretary etc) for issue 21
clear days notice of EGM to its existing shareholders, Directors and
Auditor.
A company easily increases its authorized share capital by
following the step by step procedure as below:

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Procedure
3. Holding of EGM : The Company would be next required to hold
proper EGM and pass the ordinary resolution (approval of at least
51% shareholders) as per the section 61 of the Company Act,
2013 for increase in authorized share capital and consequence of
which alteration in clause V i.e. capital clause of the
Memorandum of Association of the Company.
4. Filing of SH-7 with ROC: Section 64 of the Companies Act, 2013,
state that whenever there is increase in authorized share capital
of the Company under section 61 of the aforesaid Act, it has to
intimate the same to the ROC via SH-7, along with the fee as
mentioned in the Companies (Registration offices and Fees)
Rules, 2014, within a period of 30 days from the date of passing
of Ordinary Resolution in the EGM with following attachments:
a) Notice of Extra Ordinary General Meeting (EGM);
b) Certified true copy of the resolution passed at EGM;
c) Altered Memorandum of Association (MOA).
Once the same would be approved by the ROC, the Company would
be required to print revise MOA.

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Special Resolution or Ordinary resolution ??
Some of the person are of view that we should pass Special resolution rather than Ordinary
resolution as it involve alternation in Memorandum of Association and also involve section 13 of the
companies act, 2013 which require the alternation of memorandum of association via special
resolution.
Please appreciate that the special resolution for change in Memorandum of Association is mainly
required in case of change of name and change of registered office as governed by section 13 of the
Companies Act, 2013.
However, Increase in Authorized Share Capital is mainly governed section 61 of the Companies Act,
2013, which is complete regarding the what type of shareholder resolution is required. So in such a
scenario, passing an Ordinary Resolution would completely be enough…..

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