Change in Authorized Capital

Change in Authorized Capital

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A company may need to increase its authorized capital to support its business growth or expansion plans. The process for changing the authorized capital of a company typically involves the following steps:

1. Check the articles of association: Before initiating the change in authorized capital process, it is important to check the company's articles of association to ensure that they allow for such a change.

2. Hold a board meeting: A board meeting must be convened to approve the increase in authorized capital. The board must pass a resolution to this effect, and the minutes of the meeting must be recorded.

3. File the necessary forms with the Registrar of Companies (ROC): The company must file the necessary forms, such as Form SH-7 and Form MGT-14, with the ROC within 30 days of passing the board resolution. Form SH-7 is used for increasing the authorized capital, while Form MGT-14 is used to file the resolution passed by the board.

4. Payment of fees: A fee must be paid to the ROC for processing the change in authorized capital application.

5. Obtain the ROC's approval: The ROC will review the application and either approve or reject it. If approved, the company's authorized capital will be increased, and a new certificate of incorporation will be issued.

Documents required for changing the authorized capital of a company:

1. Board resolution: A copy of the board resolution approving the increase in authorized capital must be submitted.

2. Form SH-7: This form is used to notify the ROC of the increase in authorized capital.

3. Form MGT-14: This form is used to file the board resolution with the ROC.

4. Updated memorandum of association (MOA): The MOA must be updated to reflect the increased authorized capital.

5. Updated certificate of incorporation: A new certificate of incorporation will be issued after the ROC approves the application.

The time required for the change in authorized capital process may vary depending on the ROC's processing time and the complexity of the application. Typically, the process takes around 2-4 weeks to complete.