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
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