Increasing of Authorised Capital
A company may need to increase its authorised share capital before issuing new equity shares and increasing paid-up capital. Authorised share capital is the total value of shares a company can issue, while paid-up capital is the total value of shares the company has issued. Paid-up capital can never exceed authorised capital. Hence, if a company having an authorised capital of Rs.10 lakhs and paid-up capital of Rs.10 lakhs would like to induct new shareholders, it can do so either by: .
- Increasing authorised share capital and issuing new shares. (or)
- Transferring shares from existing shareholders to the new shareholders.
In most cases, new shares are issued and authorised capital is increased.
Get in touch with a Spoton Advisor for assistance with increasing authorised share capital...