Increase Authorised Share Capital

Each business needs more funds over time to run business. These funds can be required on a long- and short-term basis. A short-term need can be satisfied by taking loans and advances. But for the run, the company will require more funds. While registering the Private Limited Company the authorized and paid-up capital is specified in the MOA of the company. The company can therefore issue new shares within the limit of the authorized capital mentioned in the MOA. If the company wishes to issue more shares than the limit that is specified then amendments need to be done in the MOA. A company may take the necessary steps required to increase the authorized capital limit in order to issue more shares, but it cannot issue shares exceeding the authorized capital limit in any case. The Articles of Association is the document that contains the rules and regulations regarding the internal working of the company. So, before any action can be taken regarding the increase/reduction in the authorized capital, the Articles of Association must be verified to check whether a provision exists that allows for a change in the authorized capital of the company.