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Draft Board Resolution for Increase in Authorised Share Capital

A company can increase its authorised share capital by taking approval from its board of directors and shareholders. These are the two important approvals that are required in this regard.

Section 61(1)(a) of the Companies Act, 2013 prescribes that a limited company having a share capital may, if so authorised by its articles, alter its memorandum in its general meeting to increase its authorised share capital by such amount as it thinks expedient.

board resolution format for increase in authorised share capital as per companies act 2013
And, as per section 64, the company is required to intimate the changes in share capital by filing necessary form with the Registrar of Companies (RoC) within 30days of such alteration along with an altered memorandum.

The consideration and the approval of the board of directors of the company is the first step for increase in the authorised share capital of the company. After which the approval members is sought for.

Template of board resolution for increase in authorised capital is as follows—

SAMPLE
(figures are mentioned as examples, modify suitably)

#. To Approve Increase in the Authorised Share Capital of the Company

“RESOLVED THAT pursuant to the provisions of sections 61 and 64 and other applicable provisions, if any, of the Companies Act, 2013 and the rules framed thereunder, read with Article ... of the Articles of Association of the company, and subject to the approval of the members of the company, and any other approvals as may be necessary, the authorized share capital of the company be and is hereby increased from INR 20,00,000 (Indian Rupees Twenty Lakhs Only) divided into 200,000 (Two Lakh) equity shares of INR 10 (Indian Rupees Ten) each to INR 40,00,000 (Indian Rupees Forty Lakhs Only) divided into 400,000 (Four Lakhs) equity shares of INR 10 (Indian Rupees Ten) each by creating additional 200,000 (Two Lakhs) equity shares of INR 10 (Indian Rupees Ten) each ranking pari passu in all respects with the existing equity shares of the company.

RESOLVED FURTHER THAT pursuant to the provisions of section 13 and any other applicable provisions of the Companies Act, 2013 and the rules framed thereunder, and subject to the approval of the members of the company, and any other approvals as may be necessary, the consent of the Board of Directors of the company be and is hereby accorded for substituting Clause V of the Memorandum of Association of the company with the following clause:

 "V. The authorised share capital of the company is INR 40,00,000 (Indian Rupees Forty Lakhs Only) divided into 4,00,000 (Four Lakh) equity shares of INR 10 (Indian Rupees Ten) each."


RESOLVED FURTHER THAT (Name of the Director/Officer), (Designation) of the company, be and is hereby authorized to file, sign, verify and execute all such forms, papers or documents, as may be required with the appropriate authorities and to do all such acts, deeds and things as may be necessary and/or incidental for giving effect to the foregoing resolutions.”



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Relevant Resolution:

Shareholders' Ordinary Resolution for Increase in Authorised Share Capital - format available here

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NOTE: The resolution sample(s) here is only for reference, to help you with drafting. Do refer the exact provisions of the Act, relevant rules framed thereunder and any other applicable laws to be able to not to miss out anything important while drafting.

Comments

  1. Devinder Peer9/06/2019

    It helped me in drafting, thanks.

    ReplyDelete

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