28 May 2013
Banks prefer to give loan depending on the authorised capital. The ideal debt equity ratio is 2:1. So if you increase the authorised capital, you will get the loans in the above proportion. But you need to incur certain costs at the ROC for increasing the share capital.
28 May 2013
Apart from the point mentioned above, a company can be banifitted by the following way if it increse its authorise capital: 1) It will be able to raise funds by issuing of equity capital to the extent of gap between paid up and authorised capital, subject to the applicable provisions of law;
2) It can reduce it's dependence on bank loans etc.;
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