Change in Share Capital of a Compnay
- Do you want to increase your company’s share capital base?
- Package includes alteration of AOA, MOA, drafting of resolutions, & filing of forms with ROC.
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Overview of Change in Share Capital
The amount of capital to invest in the Company is one of the most critical decisions that have to be made by the supporters when a company is in its incorporation stages. As the business begins to pick up, the Company may look to expand its operations, expand in size, scale, or structure. To make that dream a reality, it may require the driving of more funds into the Company, basically increasing/Changing the share capital of the Company. Sometimes, the amount of necessary capital might surpass the limit of the authorized capital at the time.
The authorized capital is the greatest amount of Capital for which the Company can issue shares to the shareholders. As per the Section 2(8) of the Companies Act, 2013, the Authorised Capital limit is specified in the Memorandum of Association under the Capital Clause. A company may take the necessary steps required to Increase/Change the authorized capital limit to issue more shares. However, it cannot issue shares exceeding the authorized capital limit in any case.
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Change in Share Capital of Company
Kinds Associated with Change in Share Capital
These are follows :
- Increase in ‘Authorized’ Share Capital
- Combination and division all or any of the Share Capital into shares of bigger amount than existing Sharespan.
- Convert all or any of its completely settled up shares into the stock and re-convert that stock into the completely settled up portions of any division.
- Sub-Division of its shares, into the portions
- The reduction of shares.
Documents Required for Change in Share Capital
- Announcement of EGM with the descriptive statement
- Duplicate of the resolution delivered at the general meeting of the associatess
- Modified MoA and AoA
- A valid certified copy of Board resolution for alteration in AOA and MoA
- Duplicates of audited balance sheets for the past three years
- Resolution for permitting such consolidation or division and providing explanation for the equivalent.
- Credentials in proof of new capital arrangement and class of shares presented consolidated or divided
- Affidavit authenticating the petition
- Bank draft substantiating payment of request fee
- The implemented Vakalatnama or Memorandum of appearance with a copy of the Board's Resolution
- Two additional duplicates of the application
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Change in Share Capital of Compnay
What is change in share capital?
A company may, for commercial reasons, wish to alter its share capital. If authorised by its constitution, a company may alter its share capital in the following ways during a general meeting: Increase share capital by issuing new shares. Convert all or any fully paid up shares into stock.
What do you mean by share capital?
Share capital, also known as equity share capital, refers to the funds a company raises by selling shares to investors. These shares represent a piece of ownership in the company, giving shareholders rights to dividends, voting power, and a claim on company assets in the event of liquidation
What is the form for change in share capital?
In case a special resolution is passed for a change in share capital then a Form MGT-14 is mandatory to be filed with ROC. In case of an ordinary resolution, Form Sh-7 shall be filed with ROC. These forms shall be filed to the Ministry of Corporate Affairs along with the designated fee.
How is share capital increased?
A company can increase its authorized share capital by amending its Memorandum of Association (MOA) to raise the maximum limit and then following the prescribed legal procedures.
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