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Board Resolution for Increase in Authorised Share Capital
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors
________________
CIN: ________________
Date of Meeting: __________ at __________ Hours at the Registered Office of the Company.
SUBJECT: Increase in Authorised Share Capital of the Company
RESOLVED THAT the Authorised Share Capital be increased from Rs. ________/- to Rs. ________/- by creation of additional ________ Equity Shares of Rs. ____/- each.
Signature
Board Resolution for Increase in Authorised Share Capital
Corporate Finance Documentation for Indian Companies
Introduction
A Board Resolution for Increase in Authorised Share Capital is a formal corporate document that records the Board of Directors' decision to increase the company's authorised share capital. Under the Companies Act, 2013, when a company proposes to increase its authorised share capital, prior board approval must be obtained before seeking approval from the members in a general meeting. The authorised share capital represents the maximum amount of share capital that a company is authorised to issue to shareholders as stated in its Memorandum of Association.
Companies may need to increase their authorised share capital for various reasons including raising additional funds through fresh issue of shares, accommodating new investors, facilitating business expansion, or complying with statutory requirements. The board resolution specifies the existing authorised share capital, the proposed increased authorised share capital, the number of additional shares to be created, and the consequential amendment to the capital clause (Clause V) of the Memorandum of Association. This resolution is subject to shareholder approval and must be filed with the Registrar of Companies.
Benefits of Using a Standard Format
Utilising a professionally drafted board resolution format ensures that all statutory requirements under the Companies Act, 2013 and the Companies (Share Capital and Debentures) Rules, 2014 are properly addressed. A ready-to-use template saves valuable time during board meetings, reduces the risk of procedural errors, and provides a consistent framework for documenting the Board's decision on capital restructuring.
Standardised formats facilitate smoother ROC filings.
Relevance to Corporate Compliance
Increase in authorised share capital is a significant corporate restructuring activity. Following Company Registration, businesses may need to enhance their capital base to fund growth, accommodate new shareholders, or meet regulatory requirements. After the board resolution is passed, an ordinary resolution or special resolution (as applicable) must be passed at the general meeting.
Form SH-7 must be filed with the ROC within thirty days of the general meeting along with prescribed fees and stamp duty on increased capital. Companies should also ensure compliance with any applicable GST Registration requirements if the capital increase affects business operations.
Board Resolution for Increase in Authorised Share Capital – Sample Format
Company Name: _______________________________________
CIN: _______________________________________
Registered Office: _______________________________________
Email: _______________________________________
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
Date of Meeting: __.__.______
Time: ______ (Hours)
Venue: Registered Office of the Company
SUBJECT: INCREASE IN AUTHORISED SHARE CAPITAL OF THE COMPANY
The Chairman informed the Board that in view of the company's business expansion plans and requirement to raise additional funds, it is proposed to increase the Authorised Share Capital of the Company. The Board discussed the matter in detail and passed the following resolutions:
"RESOLVED THAT pursuant to the provisions of Section 13(1) read with Section 61 and Section 64 of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force) and the rules framed thereunder, and subject to the approval of members of the Company in General Meeting and subject to such other approvals as may be required, the Board of Directors hereby approves the proposal to increase the Authorised Share Capital of the Company from:
Existing Authorised Share Capital:
Rs. ________________________/- (Rupees ________________________ Only) divided into ________________________ (________________________) Equity Shares of Rs. ________________________/- each
To:
Proposed Authorised Share Capital:
Rs. ________________________/- (Rupees ________________________ Only) divided into ________________________ (________________________) Equity Shares of Rs. ________________________/- each
by creation of additional ________________________ (________________________) Equity Shares of Rs. ________________________/- 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, 61 and 64 of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force) and the rules framed thereunder, and subject to the approval of members of the Company in General Meeting, the existing Clause V (Capital Clause) of the Memorandum of Association of the Company be and is hereby substituted with the following new Clause V:
"Clause V: The Authorised Share Capital of the Company is Rs. ________________________/- (Rupees ________________________ Only) divided into ________________________ (________________________) Equity Shares of Rs. ________________________/- each."
RESOLVED FURTHER THAT the above resolutions are subject to the approval of the members of the Company in General Meeting by way of Ordinary Resolution / Special Resolution, as may be required.
RESOLVED FURTHER THAT any Director of the Company be and is hereby authorised to:
- Convene General Meeting of the members to seek approval for the proposed increase in Authorised Share Capital;
- File Form SH-7 and other requisite forms with the Registrar of Companies within the prescribed time;
- Pay the prescribed fees and stamp duty on the increased Authorised Share Capital;
- Execute and file the amended Memorandum of Association with the ROC;
- Do all such acts, deeds, matters, and things as may be necessary, proper, or expedient for giving effect to this resolution."
For ________________________________________
(Name of the Company)
Signature: __________________________
Name: __________________________
Designation: __________________________
DIN: __________________________
Frequently Asked Questions
1. Are details mentioned in the board resolution format for increase in authorised share capital the same as the special resolution format of members?
Yes, the core details such as existing authorised share capital, proposed authorised share capital, number of additional shares to be created, and the amended Clause V of the Memorandum of Association remain substantially similar in both documents. The primary difference is that the board resolution records the Board's approval, while the special resolution records approval by shareholders at a general meeting with the requisite majority.
2. Is the signature of all directors mandatory on the Board resolution format for increase in authorised share capital?
No, signatures of all directors are not mandatory. The resolution is passed by a majority of directors present and voting at a duly convened board meeting where quorum is present. The certified true copy may be signed by a single authorised director or the company secretary. The minutes record which directors were present and the voting details.
3. Should the Board resolution for increase in authorised share capital be on company letterhead?
While there is no strict statutory requirement mandating the use of company letterhead, it is standard corporate practice to prepare board resolutions on the company's official letterhead. Using letterhead enhances authenticity, provides verification of the document's origin, and is generally expected by banks, financial institutions, and the Registrar of Companies for official filings.
4. Does the Board Resolution format for increase in authorised share capital need to be certified by a professional?
There is no statutory requirement for the board resolution to be certified by an external professional. The certified true copy may be signed by any director or the company secretary. However, for filing Form SH-7 with the ROC, certification by a practising Chartered Accountant, Company Secretary, or Cost Accountant may be required as per form-specific requirements.
5. Is the board resolution format for increase in authorised share capital mandatory to be attached to the MCA form?
Yes, a certified copy of the board resolution is typically required as an attachment when filing Form SH-7 (Notice to Registrar of any alteration of share capital) with the Ministry of Corporate Affairs. Along with the board resolution, other documents such as the special/ordinary resolution passed by members, altered MOA, and proof of stamp duty payment must be submitted as part of the filing.