HOW TO INCREASE SHARE CAPITAL OF LIMITED COMPANY
PrintListen to this Article
HOW TO INCREASE SHARE CAPITAL OF LIMITED COMPANY
When a company wants to Increase its share capital, then it has to follow a specified procedure as laid down by Companies Act, 2013. Section 61 of Companies Act, 2013 describes about power of Limited Company to alter its share capital. According to this Section, if a limited company having share capital wants to alter its Share capital it may be in form of Increase / Consolidation/division of any of its share capital into shares of a larger amount then its existing share, then the primary think which we have to check is that:
- Alteration in Share capital in company is authorized by Article of Association or not.
- If authorized then, we have to alter company memorandum in its general meeting to alter composition of Share Capital in the form of Increase
- If not authorized by AOA, then first we have to alter AOA and then have to proceed further.
- Then call General Meeting of Members to pass Ordinary Resolution for alteration in Share Capital.
If above authorization is received in General Meeting then we have to move forward, according to Section 64 of Companies Act, 2013
According to Sec-64 read with Rule 15 of the Companies (Share Capital and Debentures) Rules 2014, company shall file a notice in Form –SH-7 with the registrar within a period of 30 days of such alteration in Share Capital along with altered Memorandum.
Precaution: Where any company fails to comply with provision of Section 64 then such company and every officer who is in default is liable to a penalty of Rs.1000/- for day during which this default continues, or Rs.5,00,000/- whichever is less.
Form SH-7 can be downloaded from MCA Website. Point to be kept in mind file filing SH-7
- Payment of Stamp Duty in eForm – SH-7 is mandatory to pay electronically through MCA Portal.
- Copy of Resolution for Alteration of Capital to Attach
- Copy of Altered Memorandum has to attach
This article is for the purpose of information and shall not be treated as a solicitation in any manner and for any other purpose whatsoever. For the benefits of readers a snapshot of Section is produced here, so that maximum information is given to readers within limited words. So it is advised to read particular section again for knowing detailed Provisions. It shall not be used as legal opinion and not be used for rendering any professional advice. This article is written on the basis of author’s personal experience. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of other readers.
The Author can be reached at mail –shivsharma786@gmail.com and Mobile/Whatsapp – 9911303737
Category : Corporate Law | Comments : 0 | Hits : 2408
Introduction The practice of a company keep track of its financial transactions is as old as trade itself. The upkeep of precise books of accounts has been vital for the long-term prosperity and viability of businesses, going back to the days of barter systems and continuing into today’s complex financial systems. This essay will examine the importance of books of accounts and all of the benefits they provide to companies of all kinds. What are Books of Accounts? The s...
Introduction In India, registering a company is a complex procedure. A company’s incorporation process involves a number of officials, including chartered accountants and company secretaries. These individuals make a significant contribution to the company registration procedures available in India. However, one such entity is frequently overlooked during the incorporation process. It can be easy to overlook the Company Registrar who issued the registration certificate in these si...
Introduction Due diligence is an inquiry or audit conducted before a transaction, such as an acquisition, investment, business partnership, or bank loan, to guarantee compliance with financial, legal, and environmental reports in order to register a company in India. The outcomes of all these inquiries and audits will be collected into a Due Diligence report. For startups in India, conducting due diligence about the company is important during the investment stage. To guarantee complian...
Introduction India is a country that attracts a lot of private equity and foreign direct investment (FDI) due to its rapid expansion. India has the second-largest population in the world and a wealth of skilled IT workers, which makes it an appealing destination for investment from foreign businesses and individuals. This article will explain why establishing an Indian subsidiary is not as tough as you may believe. In this article, we will also include information on What is an Indian S...
The mandatory dematerialisation requirement is applicable on all securities of every private company, excluding small companies and government companies. The provisions are applicable with immediate effect, and a timeline of 18 months is provided from the closure of the financial year in which a private company is not a small company for the compliance with the mandatory dematerialisation requirements. For example, a private company (other than a company that is a small company as on 31st Marc...
Comments