Increase Share Capital FAQ in Coimbatore

a) What is Increase Share Capital?

Increase Share Capital generally refers to increasing a company's authorised share capital so that it can issue additional shares within the revised authorised limit. The process involves the required corporate approvals and MCA filing.

b) Why does a company need to increase its authorised share capital?

A company may need to increase its authorised share capital when it plans to issue additional shares, bring in new investment, raise subscribed capital or accommodate future funding requirements beyond its existing authorised limit.

c) Who can increase the share capital of a company?

A company having share capital may alter its authorised share capital when permitted by its Articles of Association and after following the applicable requirements under the Companies Act, 2013.

d) What is the process for increasing authorised share capital?

The process generally involves checking the Articles of Association, obtaining the required Board and shareholder approvals, altering the Memorandum of Association where applicable, and filing the prescribed notice with the Registrar of Companies.

e) Is a Board Resolution required to increase share capital?

The company's Board generally initiates the proposal and recommends the required action. The applicable corporate approvals depend on the type of capital alteration and the company's constitutional documents.

f) Is shareholder approval required for increasing authorised capital?

Increasing authorised share capital generally requires approval in a general meeting when the applicable provisions of the Companies Act and the company's Articles require it. The resolution and related filings should be completed correctly.

g) What is Form SH-7?

Form SH-7 is the prescribed MCA form used to notify the Registrar of certain alterations in a company's share capital. For an increase in authorised share capital covered by the relevant provisions, the company files SH-7 along with the required documents and fee.

h) What documents are required to increase share capital?

Documents may include the company's incorporation and constitutional records, existing capital details, Board and shareholder resolutions, altered Memorandum where applicable, and other supporting documents required for the MCA filing.

i) Can a Private Limited Company increase its authorised share capital?

Yes. A Private Limited Company can increase its authorised share capital by following the applicable provisions of the Companies Act, 2013, its Articles of Association and MCA filing requirements.

j) Can an OPC increase its authorised share capital?

An OPC can alter its authorised share capital subject to the applicable provisions and procedural requirements. The filing and approval process should be handled according to the company's structure and current MCA requirements.

k) Can a Public Limited Company increase its authorised share capital?

Yes. A Public Limited Company can increase its authorised share capital by following the applicable provisions of the Companies Act, its Articles and the required corporate and MCA filing procedures.

l) Can authorised share capital be increased without issuing new shares?

Yes. Increasing authorised share capital changes the maximum share capital that the company is authorised to issue. It does not by itself mean that new shares have already been issued or allotted.

m) What is the difference between authorised and paid-up share capital?

Authorised share capital is the maximum share capital a company is authorised to issue under its Memorandum. Paid-up share capital represents the amount paid by shareholders on shares issued by the company.

n) Does increasing authorised capital automatically increase paid-up capital?

No. An increase in authorised capital only raises the permitted ceiling for issuing shares. Paid-up capital increases separately when shares are actually issued and allotted and the applicable requirements are completed.

o) Can a company increase share capital for bringing in new investors?

Yes, a company may increase its authorised capital when additional shares are proposed to be issued to investors, subject to the applicable provisions governing further issue of shares, approvals and filings.

p) Can share capital be increased for business expansion?

Yes. Companies may increase their authorised capital when they need additional capacity for issuing shares as part of expansion, investment, fundraising or other business requirements.

q) How long does it take to increase authorised share capital?

The timeline depends on the company's records, approval schedule, preparation of documents and MCA processing. Applications with complete and accurate information can generally be processed more efficiently.

r) What is the cost of increasing share capital?

The total cost can include applicable MCA statutory fees based on the amount of capital being increased, professional service charges and other applicable expenses. The exact amount depends on the company and proposed increase.

s) Is there an MCA fee for increasing authorised share capital?

Yes. Applicable MCA filing fees are payable for the prescribed filing, and the amount can depend on the authorised capital being increased and the applicable fee structure at the time of filing.

t) Does the Memorandum of Association need to be changed?

Where the authorised share capital clause in the Memorandum is altered, the company needs to file the altered Memorandum as required. The MCA SH-7 process provides for the relevant alteration where applicable.

u) Can authorised share capital be increased more than once?

A company may increase its authorised share capital more than once when required, provided each increase is carried out in accordance with the Companies Act, the Articles of Association and applicable MCA filing requirements.

v) Can authorised share capital be increased before raising investment?

Yes. A company may increase its authorised share capital before a proposed share issue when its existing authorised limit is insufficient for the intended issue, subject to completing the required approvals and filings.

w) Does increasing share capital affect GST registration?

Increasing authorised share capital does not by itself change a company's GST registration. However, related changes in business, ownership or other registration details may require separate compliance depending on the circumstances.

x) Can a company increase authorised capital without changing its shareholders?

Yes. Increasing authorised capital does not by itself require a change in the existing shareholders. Any subsequent issue or allotment of shares is a separate corporate action and may affect ownership depending on how the shares are issued.

y) Can Embark help with Increase Share Capital Services in Coimbatore?

Yes. Embark CorpServ can assist companies in Coimbatore with the documentation, resolutions, authorised capital increase process and applicable MCA filing requirements for increasing share capital.

z) Why choose a consultant for increasing share capital in Coimbatore?

A consultant can help review the company's existing capital structure, prepare the required documents and resolutions, coordinate the applicable filing process and reduce errors in the share capital alteration compliance.