Increase in authorised share capital

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2011 Pl confirm for increasing the authorized share capital of the company ,a special resolution is required or an ordinary resolution.AOA of the company provides for that authorized share capital of the company be such amount as provided by Clause V of the MOA with power to increase ,divide ----.

Special resolution is required for Alter in AOA or is required for change in MOA also?

RG - A Helping Hand

RG - A Helping Hand (Expert)
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09 November 2011 No dear in your case passing of special resolution is not required as you do not need to amend your AOA.

Simply pass an ordinary resolution u/s 94 in GM and file form-5.

RG

Querist : Anonymous

Querist : Anonymous (Querist)

11 November 2011 Ok ,Thx for the reply.

Further pl confirm if at the same time(means at the time of increasing Authorised capital,)there is an increase in subscribed /paid up capital also what other formailites needed to be complied up with ,For eg ,Authorised share capital increase from 10L 50 100 L ,Application money then received for Rs 50 L ,but shares alloted for Rs 20 L ,what all resolutions /forms need to be filled up .

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RG - A Helping Hand

RG - A Helping Hand (Expert)
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14 November 2011 First increase your AC.

After that hold a board meeting and pass board resolution for allotment of shares. After that file form 2 to ROC for allotment of shares.

Querist : Anonymous

Querist : Anonymous (Querist)

16 November 2011 As with the decision of The Hon'ble High
Court of Delhi in the matter of S E Investments Limited Vs Union of India and
Others [W.P. (c) 2393/2010 and CM Appl.4794/2011] that there is no provision in the Delhi Stamp Act for payment of stamp
duty on "increased authorised capital",in option no 11(b) of form 5 ,which option is to be selected ,if we select yes or not applicable ,still it shows amount of stamp duty & in case we select no ,at the time of uploading of form 5 at mca site it generate challan with amount to be paid ?

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2011 At the time of filling form 5 it is showing as :

Service Type Descripttion Type of Fee Rs.

Form Filing of Form5 Normal 00.00

MoA Normal 55,000.00

Total 55,000.00

So ,what it mean ,like for form 5 although it is showing fee as Zero but it is showing Rs. 55000 against capital increase of Rs. 1.10 Crores ,what is the basis of these calculations & where is the implementation of High court order as against above .

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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01 August 2024 To address your queries regarding increasing the authorized share capital of a company in India, let’s break it down step-by-step:

### **1. Special Resolution vs. Ordinary Resolution**

**Special Resolution:**
- **Required for:** Increasing the authorized share capital of a company. This is because the Companies Act, 2013, mandates that any alteration of the authorized share capital requires a special resolution passed by the shareholders.
- **Threshold:** A special resolution requires a three-fourths majority of the members present and voting.

**Ordinary Resolution:**
- **Required for:** Regular business decisions that do not involve alterations to the capital structure or significant changes to the Memorandum of Association (MOA) or Articles of Association (AOA).

### **2. Alteration of AOA and MOA**

- **Alteration of AOA:** If the AOA does not provide for the increase of authorized share capital or needs amendments to reflect the increased capital, a special resolution is required.
- **Alteration of MOA:** If the increase in authorized share capital affects the MOA (particularly Clause V related to the share capital), then the MOA needs to be altered, and this requires a special resolution as well.

### **3. Filing Form 5 and Fees**

**Form 5:**
- **Purpose:** Used to notify the Registrar of Companies (ROC) about the increase in authorized share capital.

**Fee Structure:**
- The fee for filing Form 5 is generally nominal. However, there are other charges related to the alteration of the MOA and AOA, which might be more significant.
- **Example Breakdown:**
- **Form Filing of Form 5:** Fee is listed as zero.
- **MOA Fee:** The charge of ₹55,000 is likely related to the increase in share capital, based on the authorized share capital amount and possibly other statutory fees.

**Basis of Calculation:**
- The fees for increasing authorized share capital are calculated based on the capital increase amount and are specified in the Companies (Registration Offices and Fees) Rules, 2014. For instance, an increase in share capital of ₹1.10 crores may attract a fee based on a slab rate for different amounts of increase.

### **4. Implementation of High Court Orders**

- **High Court Orders:** If there is a High Court order regarding the increase in share capital, it should be complied with. The order must be implemented by filing the necessary documents with the ROC, and fees should be calculated according to the prescribed rules.

### **Summary**

1. **Special Resolution:** Required for both increasing authorized share capital and altering the MOA or AOA.
2. **Form 5:** The filing fee may be nominal, but there are other fees related to the alteration of capital in the MOA.
3. **Fee Calculation:** Based on the increase in capital and other statutory guidelines.
4. **High Court Orders:** Should be implemented as directed and reflected in the statutory filings.

If there are discrepancies or doubts about the fee calculations or compliance with court orders, consulting with a company secretary or legal advisor is recommended to ensure proper adherence to legal requirements.