More about Increase in Authorized Share Capital
Frequently Asked Questions
What is the authorised share capital of a company?
The authorised capital of a company is the maximum amount of share capital that the company is authorised by its constitutional documents to issue to shareholders (at book value). A company can decide its authorised capital and can increase it as an when needed.
What is the paid up capital for a company?
Paid up capital of a company is the amount for which the company has issued shares to its shareholders for the equity capital they have invested in the company (at book value). This has to be less than or equal to the authorised share capital of the company.
Is it mandatory to increase the authorised share capital of the company while raising fund?
As fresh shares are issued, the paid up capital of the company increases. In case the authorised share capital of a company does not offer buffer to increase the paid up capital while issuing shares for the investment coming into the company, the authorised share capital will need to be increased.
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