To do this, you need to have the capital clause of the Memorandum of Association amended by passing a special resolution of the board.
Increase in Authorised Capital
The maximum number of shares a private limited company can issue is decided by its authorised capital. Most start-ups start their journey with the minimum authorised capital of Rs. 1 lakh, but this is too little as the business grows. To issue new shares or raise the capital a company is authorised to raise, the capital clause of the Memorandum of Association needs to be amended by passing a special resolution of the board. If, at this point, you may also need shares to be issued to existing promoters or new shareholders.
Request a call back
Issuing New Shares?
To Existing Promoters
If you are increasing the authorised capital and issuing new shares to existing promoters, a board meeting needs to be called and Form PAS-3 needs to be filed with the Registrar of Companies (RoC), intimating the allotment of shares.
To New Shareholders
Issuing shares to new shareholders is a complicated procedure, necessitating a valuation report from a chartered accountant.
