Check the Articles of Association (AoA): Review the company’s AoA to determine if it contains provisions regarding the procedure for changing the authorized share capital. Ensure that the proposed change is consistent with the provisions mentioned in the AoA.
Convene Board Meeting: Call a meeting of the board of directors to propose the change in the authorized share capital. Pass a board resolution approving the proposed change and record the resolution in the minutes of the meeting.
Shareholder Approval: Shareholder approval is typically required for changing the authorized share capital. Depending on the extent of the change, shareholder approval may be obtained through an ordinary resolution (for minor changes) or a special resolution (for significant changes). Notice of the general meeting, along with the proposed resolution, must be sent to all shareholders as per the prescribed timelines.
File Form SH-7: File Form SH-7 with the Registrar of Companies (RoC) within 30 days of passing the resolution. This form is used for intimating the RoC about the change in the authorized share capital. The form should be accompanied by the necessary attachments, such as the board resolution, special resolution (if applicable), and altered Memorandum of Association (MoA).
Update MoA and Share Certificate: Amend the MoA of the company to reflect the changed authorized share capital. Issue new share certificates to the shareholders to reflect the revised share capital, if applicable.
Pay Stamp Duty: Pay the required stamp duty on the revised authorized share capital. The stamp duty amount may vary depending on the jurisdiction and the applicable stamp duty rates.
Update Other Records: Update the company’s records, including the register of members, share ledger, and any other relevant documents or registers, to reflect the revised authorized share capital.
Compliance with Stock Exchange (if applicable): If the company is listed on a stock exchange, comply with the listing agreement requirements and regulations of the respective stock exchange. Inform the stock exchange about the change in the authorized share capital and submit any necessary documentation.
