Increase Authorized Capital

Increasing the authorized capital of a company involves a formal process that requires adherence to legal and regulatory procedures. The authorized capital is the maximum amount of capital that a company is allowed to issue in its shares. Here's a general guide on how to increase the authorized capital of a company

Review Articles of Association: 

Purpose: Check the company's articles of association to understand any provisions related to changing the authorized capital. Some companies may have specific procedures outlined in their articles.

Hold a Board Meeting: 

Purpose: Convene a board meeting to discuss and approve the proposal to increase the authorized capital.

Content: The board resolution should detail the decision to increase the authorized capital, specify the new amount, and outline the reasons for the increase.

Check Shareholders' Approval Requirements: 

Purpose: Determine whether shareholder approval is required for the increase in authorized capital. This depends on the company's articles of association and local regulations.

Content: If shareholder approval is required, convene a general meeting and present the proposal for their consideration. Obtain the required majority vote through a resolution.

Amend the Articles of Association (if necessary): 

Purpose: If the increase requires changes to the articles of association, prepare the necessary amendments.

Content: Draft a special resolution to amend the articles, reflecting the new authorized capital. File the resolution and amended articles with the relevant authorities.

File Necessary Forms: 

Purpose: File the required forms with the company registrar or relevant regulatory authority to officially register the increase in authorized capital.

Content: Provide details of the increased authorized capital, the date of the resolution, and any other information required by the regulatory authority.

Notification to Regulatory Authorities: 

Purpose: Notify regulatory authorities, such as the securities commission, of the increase in authorized capital.

Content: Submit the necessary notifications and documentation to ensure compliance with securities regulations.

Update Company Records: 

Purpose: Amend the company's records to reflect the increase in authorized capital. This includes updating the register of members and share certificates.

Content: Ensure that the register of members accurately reflects the changes, including the updated authorized capital.

Notify Stock Exchanges (if applicable): 

Purpose: If the company is listed on a stock exchange, notify the exchange of the change in authorized capital.

Content: Provide the necessary information and documentation to the stock exchange in compliance with listing rules.

Update Internal and External Documents: 

Purpose: Update internal documents, such as the memorandum of association, and external documents, including business contracts, to reflect the new authorized capital.

Communicate with Shareholders: 

Purpose: Inform shareholders about the increase in authorized capital.

Content: Share details of the board or shareholder resolution through meeting minutes, circulars, or other official communication channels.