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Procedure For Increase In Authorised Capital Of A Company

1. Check the Articles of Association(AoA) of the Company to verify whether necessary authority/powers is there to increase the authorised share capital of the Company. (ref: Section 61)

Note: If such authority is not provided for in the Articles of Association, then the provisions in AoA has to be amended to include provisions authorising the company to increase its share capital. Such amendment could be done by passing of Special Resolution. (ref: Section 14)

2. Issue the Board Meeting notice in writing (by giving not less than seven days’ notice) and convene the Board Meeting to decide about the increase and to fix up the date, time, place and agenda for convening a General Meeting for passing of an Ordinary Resolution or Special Resolution, if so required by the Articles, for the same. (ref: Section 173)

Note: Generally, an EGM is called for to transact the business of increase in share capital and any other businesses. However, in case an AGM is to be held in the recent future, the Company could take up this matter too under "Special Business" and seek consent of members.
3. Issue notices in writing at least 21 days before the date of the meeting for the General Meeting with Explanatory Statement as required under Section 102 of the Companies Act 2013. (ref: Section 101 & Section 102)

4. Hold the general meeting and pass the necessary resolution with required majority. (ref: Section 114)

5. File the Form MGT-14 within 30 days for the Special Resolution passed at the General Meeting.

Note: Form MGT-14 is only required to be filed in case of special resolution passed for the alteration of the AoA, as mentioned in the Note to point no. 1 at the top.

6. File the Form SH-7 with the annexures (Copy of the resolution for alteration of capital, Altered memorandum of association, etc) and make the payment for the stamp duties online.

7. With the approval received from RoC for the Form SH-7 filed with MCA, the changed status of authorised capital of the Company can be checked at MCA site.

The RoC may reject the application for any deficiencies/violation of law or can ask for certain clarification, in which case the form has to be resubmitted at the MCA site.

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