A company can increase its authorised share capital by passing an ordinary resolution (unless its articles of association require a special resolution). A copy of the resolution – and notice of the increase on Form 123 – must reach Companies House within 15 days of being passed. No fee is payable to Companies House.
The members of the company anytime during the tenure of the company may increase or decrease the capital of the company. The company can increase its paid-up capital by issuing shares either to an existing shareholder or to any other person whether it is a public limited company or it is a private limited company.
The amount of share capital can be either increased or reduced. In either case, the Companies Act regulates the procedures for such changes. … Additionally, to reduce the amount of share capital, consent of the company’s creditors may be required.
Issuing of extra shares will require a resolution to be passed by a general meeting of the company shareholders. The only way of avoiding diluting the company further by issuing shares to new investors is by existing shareholders taking up the extra shares on top of their own.
Consolidation and sub-division of share capital
(b) consolidate and divide all or any of its share capital into shares of a larger nominal amount than its existing shares.” This allows a company to alter the number of shares and their nominal value, without changing the overall amount of share capital.
Increases in the total capital stock may negatively impact existing shareholders since it usually results in share dilution. … As the company’s earnings are divided by the new, larger number of shares to determine the company’s earnings per share (EPS), the company’s diluted EPS figure will drop.
How to increase the authorized share capital of the company?
- Verify AOA of the Company. …
- Convene a Board Meeting. …
- Extra-Ordinary General Meeting. …
- File ROC Forms. …
- Allotment of Shares.
Section 61 of Companies Act, 2013 deals with power of limited company to alter its share capital. According to this section a limited company having a share capital may, if so authorized by its articles, alter its share capital by passing an ordinary resolution in general meeting.
What are the different ways to raise capital?
How to raise capital for a startup: 6 capital raising strategies
- Fund it yourself. It might not sound ideal, but dipping into your personal savings is probably the easiest way to raise capital for a startup. …
- Business loan. …
- Crowdfunding. …
- Angel investment. …
- Personal contacts. …
- Venture capitalist.
A company can increase its authorised share capital by passing an ordinary resolution (unless its articles of association require a special resolution). A copy of the resolution – and notice of the increase on Form 123 – must reach Companies House within 15 days of being passed.
How to issue shares – step by step
- 1 Provide the applicants with a form of application. …
- 2 Shares are allotted via board resolution. …
- 3 Issue share certificates to those who have been allotted shares. …
- 4 Complete a return of allotments via form SH01 to Companies House.
A sub-division increases the number of shares that a company has in issue. Consolidation is a process by which a company may change the structure of its share capital by amalgamating some or all of its issued shares into shares of a higher nominal value.