Share Allotment and Increase Authorised Capital

The share capital is a contribution towards company’s capital which is raised through issue of shares. A company may raise capital only to the extent of the authorized capital mentioned in the company. To increase the capital raising capacity, the authorized capital can also be increased any time after incorporation by payment of additional fee and stamp duty.

A company can issues shares only to the extent of authorized capital. Hence, it determines the number of shares a company can issue which is mentioned in the Capital Clause of MoA. In order to increase capital raising capacity, it has to increase the authorized capital first. To alter authorized capital clause, the company need to conduct a meeting of Board and Member that is followed by application to MCA.