On the verge of starting a new business in India, the promoters while incorporating their private limited company or public limited company have to decide the amount of share capital of the company. Having share capital of the company is one of the most important aspects while incorporating a new setup as it defines the nature of company. The authorised share capital is the maximum amount of shares value the company can allot to its shareholders. It means it is the maximum value of securities that can be legally issued by the company.
The company can issue shares to its subscribers out of the authorised share capital which is called as issued share capital or paid up capital.
The need of increasing the authorised share capital is due to the prerequisite condition, that the company cannot issue securities to the subscribers more than the authorised share capital of the company. The authorised share capital of company can be increased at any time, after its incorporation, which is governed by section 61 read with section 13 and 14 of the Companies Act, 2013.
The company while performing its business operations may, at later stage, require more funds to flow in the company for expanding its business or, to meet the expenditure requirements that may arise in future, which is not possible without increasing the authorised share capital of the company.
StartUp Movers can help you to change the authorized capital of the company and to complete all the necessary forms filings with registrar of Companies, documentation and other related things.