Increase Authorized Capital
Overview
A company may have to extend its authorized share capital before
issuing new equity shares and increasing paid-up capital.
Authorized share capital is that the total value of shares a
company can issue, while paid-up capital is that the total value
of shares the company has issued. Paid-up capital can never
exceed authorized capital. Hence, if a company having an
authorized capital of Rs.10 lakhs and paid-up capital of Rs.10
lakhs would like to induct new shareholders, it can do so either
by:
Increasing authorized share capital and issuing new shares. (or) Transferring shares from existing shareholders to the new shareholders. In most cases, new shares are issued and authorized capital is increased.
Increasing authorized share capital and issuing new shares. (or) Transferring shares from existing shareholders to the new shareholders. In most cases, new shares are issued and authorized capital is increased.
