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Board Resolution for Increase in Paid Up Share Capital
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
________________
CIN: ________________
Registered Office: ________________
Date of Meeting: __________
Time: ______ (Hours)
Venue: Registered Office of the Company
SUBJECT: INCREASE IN PAID UP SHARE CAPITAL BY WAY OF RIGHTS ISSUE
The Chairman informed the Board about the requirement for additional capital to meet the business needs of the Company. After thorough deliberation, the Board decided to proceed with a further allotment of shares by way of Rights Issue to the existing members of the Company. The following resolution was passed unanimously:
"RESOLVED THAT pursuant to the provisions of Section 62 of the Companies Act, 2013 read with the Companies (Share Capital and Debentures) Rules, 2014 and other applicable provisions (including any statutory modification(s) or re-enactment thereof for the time being in force), and subject to the approval of the members of the Company, the Board hereby approves the issue and allotment of:
Number of Equity Shares:
Face Value per Share: Rs. ________________
Aggregate Nominal Value: Rs. ________________ (Rupees ________________ only)
(hereinafter referred to as "New Shares"), such issue to be made on the following terms and conditions:
- The issue of shares shall be made in proportion to the total equity shares held by each member as on the record date, being ________________.
- The offer to members shall be made by way of a Letter of Offer indicating the number of shares held by each member, the number of shares to which each member is entitled as rights shares, the price per share, and the total amount payable if the offer is accepted in full.
- The offer shall remain valid for a maximum period of ________________ days from the date of opening of the offer, and shall include the right for the person to whom the offer is made to renounce the shares offered in favour of any other person.
- Upon expiry of the offer period or upon receipt of earlier intimation from any person declining to accept the shares offered, the Board of Directors shall be authorised to dispose of the unsubscribed portion of the New Shares in such manner as they consider most beneficial to the Company.
- The equity shares so issued shall, upon allotment, rank pari passu with the existing equity shares of the Company in all respects, including voting rights, and shall be entitled to dividend, if any, proportionately for the year of allotment.
- Share certificates shall be issued to the allottees within the time prescribed under the Companies Act, 2013.
RESOLVED FURTHER THAT any Director of the Company be and is hereby authorised to take all necessary steps to implement the above resolution, finalise and issue the Letter of Offer, execute all documents, and take all actions in connection with the further issue and allotment of shares to the members and others, as applicable.
Certified to be a True Copy
For ________________
(Name of the Company)
Signature: _________________________
Name:
Designation:
DIN:
Date:
Place:
Board Resolution for Increase in Paid Up Share Capital
Comprehensive Guide for Capital Expansion & Regulatory Compliance
Introduction
A Board Resolution for Increase in Paid Up Share Capital is a formal corporate document that records the Board of Directors' consent to issue additional shares, thereby increasing the company's paid-up capital. Under the Companies Act, 2013, a company may increase its paid-up share capital through rights issue to existing members, private placement, or other permissible modes. Prior board approval is mandatory before seeking shareholder consent for such capital increase.
This resolution specifies the number of shares to be issued, their nominal value, terms of issue, and authorises designated representatives to implement the allotment process. It is essential for regulatory filings with the Registrar of Companies and forms part of the documentation required for Form PAS-3 (Return of Allotment).
Benefits of Using a Standard Format
A professionally drafted board resolution ensures all statutory requirements under the Companies Act, 2013 and related rules are properly addressed. A ready-to-use template saves time, reduces procedural errors, and provides a comprehensive framework covering issue terms, renunciation rights, and disposal of unsubscribed shares.
Standardised formats also facilitate smoother ROC filings and compliance tracking.
Relevance to Corporate Compliance
Increasing paid-up share capital is a significant corporate decision with multiple compliance implications. The board resolution forms the foundation for subsequent shareholder approval and ROC filings. After allotment, Form PAS-3 must be filed within 30 days, and share certificates issued within the prescribed timeline.
Board Resolution for Increase in Paid Up Share Capital – Sample Format
Company Name: _______________________________
CIN: _______________________________
Registered Office: _______________________________
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company on __________ (Date) at __________ (Time) at the Registered Office of the Company.
SUBJECT: Increase in Paid Up Share Capital by Way of Rights Issue
The Board resolved to proceed with a further allotment of shares by way of Rights Issue to existing members. The resolution was passed unanimously as follows:
RESOLVED THAT pursuant to Section 62 of the Companies Act, 2013 read with Companies (Share Capital and Debentures) Rules, 2014 and other applicable provisions, and subject to members’ approval, the Board approves the issue and allotment of:
Number of Equity Shares: _______________________________
Face Value per Share: Rs. _______________________________
Aggregate Nominal Value: Rs. _______________________________ (Rupees _______________________________ only)
Terms and Conditions:
- The issue shall be made in proportion to equity shares held by each member as on the record date, __________.
- A Letter of Offer shall indicate the number of shares held, rights shares entitled, price per share, and total payable if accepted.
- The offer remains valid for fifteen (15) days and includes renunciation rights.
- Board is authorised to dispose of unsubscribed shares as deemed beneficial to the Company.
- Shares issued shall rank pari passu with existing equity shares, including dividend and voting rights.
- Share certificates shall be issued to allottees within the time prescribed under the Companies Act, 2013.
RESOLVED FURTHER THAT any Director is authorised to take necessary steps to implement this resolution, finalise the Letter of Offer, execute documents, and act in connection with the issue and allotment.
For ________________________________________ (Name of the Company)
Signature: _______________________________
Name: _______________________________
Designation: _______________________________
DIN: _______________________________
Date: _______________________________
Place: _______________________________
Frequently Asked Questions
1. Are details the same as in the shareholder special resolution?
Yes, core details like number of shares, face value, and terms are similar. The difference is the approving authority: board resolution records directors’ recommendation, while the shareholder resolution records members’ approval.
2. Is signature of all directors mandatory?
No. Passed by majority of directors present. Certified true copy can be signed by an authorised director or company secretary. Minutes should record attendees and voting.
3. Should it be on company letterhead?
Not legally required, but considered good practice. Letterhead adds authenticity and aids verification by regulators, auditors, banks, and stakeholders.
4. Does it need to be certified by a professional?
No statutory requirement. However, Form PAS-3 filing may require certification by a practising professional such as Company Secretary, CA, or Cost Accountant.
5. Is it mandatory to attach the board resolution to MCA Form PAS-3?
Yes. The board resolution is a mandatory attachment along with shareholder approval, list of allottees, consideration details, and valuation report (if applicable). The form must be filed within 30 days of allotment.