Capital stock is the number of shares that can ever be outstanding or held by shareholders. … However, a company commonly has the right to increase the amount of stock it’s authorized to issue through approval by its board of directors.
Can Authorised capital be increased?
The authorised capital is the maximum amount of capital for which the Company can issue shares to the shareholders. … A company may take the necessary steps required to increase the authorised capital limit in order to issue more shares, but it cannot issue shares exceeding the authorised capital limit in any case.
Authorized share capital is set by the shareholders and can only be increased with their approval.
Form SH-7 needs to filed within 30 days of passing the ordinary resolution with the concerned Registrar of Companies. The concerned RoC will verify the form and the attached documents, after which it will send the approval to increase the authorized share capital of the company.
Can the company alter Authorised capital?
Company can increase its authorized share capital, only if it is authorized by its Articles of Association and after obtaining approval of members by ordinary resolution.
Yes Authorized share capital can be reduced, this is known as Diminution. Diminution of capital (i.e. share capital) of a Company means reduction of the share capital by cancellation of the unsubscribed part of the issued capital.
How is Authorised capital decided?
Authorised Share Capital
It is the maximum amount of the capital for which shares can be issued by the Company to shareholders. The Authorised capital is mentioned in the Memorandum of Association of the Company under the heading of “Capital Clause”. It is even decided prior to incorporation of the Company.
Is Authorised capital same as issued capital?
Authorized Capital refers to the face value of the shares which a joint-stock company is permitted to issue, by its memorandum of association. … On the other hand, Issued capital refers to the capital raised by the company by actually issuing shares to the public for subscription and allotment.
With the permission of the shareholders, a company can increase its authorized capital at any time. Paid-up capital actually increases the amount of equity available to a company as well as its net worth.
What is the difference between paid up capital and Authorised capital?
Authorized capital is the maximum value of the shares that a company is legally authorized to issue to the shareholders. Whereas, paid-up capital is the amount that is actually paid by the shareholders to the company.
Stamp duty shall be Rs. 1000 on every Rs. 5 Lakhs of amount of increase in authorised capital or part thereof subject to a maximum of 50 Lakhs of stamp duty.
How can a company increase capital?
Procedure To Increase Authorized Capital Of Company
Issue notice to members of the company as per Section 101 of the Companies Act, 2013 to call a general meeting and pass “Special Resolution” for increasing authorized capital. File MGT-14 within 30 days from the date of passing Special Resolution.