Increase in Authorized Share Capital comes up with a lot of questions, especially for companies planning to issue more shares than their current authorized capital allows dealing with it for the first time. Here are clear answers to what we're asked most often.
What's the difference between authorized and paid-up capital?
Authorized capital is the maximum a company can issue; paid-up capital is what's actually issued and paid for by shareholders.
Is shareholder approval always required?
Yes, increasing authorized capital typically requires shareholder approval, not just board approval.
Does this apply to LLPs too?
LLPs have a different capital contribution structure, so this specific process applies to companies.
Is there a fee involved?
Yes, government fees typically apply based on the amount of capital increase.
Still Have Questions?
Every business situation is a little different, and Increase in Authorized Share Capital is no exception. If your case doesn't fit neatly into the questions above, it's worth getting a second opinion before proceeding.
What You'll Typically Need
- Current authorized capital as per the Memorandum of Association
- Board resolution proposing the increase
- Shareholder approval through a general meeting
- Altered Memorandum of Association reflecting the new capital
Need Help With This?
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