Change Authorised Capital of Company.
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When a company is in its incorporation stages, one of the most important decisions that have to be made by the promoters is the amount of capital to invest in the company. As the business begins to pick up, the company may look to expand its operations, expand in size, scale or structure.
To make that dream a reality, it may require the pumping in of more funds into the company, basically increasing the share capital of the company. Sometimes, the amount of capital required might surpass the limit of the authorised capital at the time.
The authorised capital is the maximum amount of capital for which the Company can issue shares to the shareholders. As per Section 2(8) of the Companies Act, 2013, the Authorised Capital limit is specified in the Memorandum of Association under the Capital Clause.
A company may take the necessary steps required to increase the authorised capital limit in order to issue more shares, but it cannot issue shares exceeding the authorised capital limit in any case.