Increase in Authorized Capital

There are several reasons why a company might want to increase its authorized share capital:

• Raising Additional Funds: By issuing new shares, a company can raise additional capital to fund growth, expansion, or acquisitions.

• Restructuring: Increasing authorized share capital can be part of a corporate restructuring process, such as a merger or acquisition.

• Dividend Payments: A higher authorized share capital can provide flexibility for future dividend payments.

1. Check Articles of Association: The AOA of the Company must have a provision to alter or increase the authorized capital. In case no such provision is mentioned in the AOA then it has to be amended first by taking shareholder's approval via Special Resolution.

2. Conduct Board Meeting: The company's board of directors must pass a resolution approving the increase in authorized share capital. 

3. Notice to Shareholders: The company must notify its shareholders of the proposed increase, either through a general meeting or a written notice.

4. Shareholder Approval: Shareholders must approve the increase in authorized share capital at a general meeting.

5. Filing Form MGT-14:  The Company must file Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing resolution for alteration of AOA, if applicable. 

6. Filing Form SH-7: The company must file Form SH-7 with the Registrar of Companies (ROC) within 30 days of the shareholder approval.

7. Payment of Stamp Duty: The company may need to pay stamp duty on the increased authorized share capital. The amount of stamp duty varies by state.