The Company which has decided for increasing its Capital, first it need to check the existing Authorised Share Capital because the Company cannot issue the shares beyond the authorized Share capital therefore for issuing the shares is required to increase the authorized share capital by altering the Memorandum of Association of the Company. The Company having the Share Capital may if so authorized by the Article of Association can alter the Share Capital the Company needs to follow the procedure as prescribed under the Companies Act, 2013.
Procedure for Alteration of Share Capital:
1. Check authority in articles of association
2. Board resolution for authorising alteration in share capital and amendment in memorandum of association
3. Board resolution for alteration in articles of association, if share capital clause is also mentioned in articles of association
4. Ordinary resolution for authorising alteration in share capital and amendment in memorandum of association
5. Special resolution for alteration in articles of association (if share capital is specifically mentioned in the articles of association) 6. eForm SH-7 for notice to registrar for alteration of share capital within 30 days of approval of members along with:
(a) Ordinary/special resolution
(b) Altered memorandum of association
(c) Altered articles of association (if altered)
(d) Copy of order of central government/tribunal & working for calculations of ratios (in case of conversions) (if applicable)
The article has been prepared considering the relevant Guidelines/ Circulars/ Notifications/ Provisions of the Companies Act, 2013, the rules made there under & The Companies Act, 2013. Readers are requested to cross-check the provisions before acting upon the same. The author will not be liable for any damages or penalties caused.