Share capital can be increased by issuing new shares, and by paying up issued shares in cash or in kind. Share premium can be brought into a company by a contribution in cash or in-kind on the existing shares of a company.
Form SH-7 needs to filed within 30 days of passing the ordinary resolution with the concerned Registrar of Companies. The concerned RoC will verify the form and the attached documents, after which it will send the approval to increase the authorized share capital of the company.
The share capital can be increased through a share issue, issue of option rights or other special rights, increase from reserves or investment in share capital. The applicable procedures for increasing or reducing the share capital shall be set out in a resolution of a general meeting of shareholders.
As per section 617 of the Companies Act 2006, a limited company is permitted to alter its share capital in the following ways:
- allotting (issuing) new shares.
- reduction of share capital.
- sub-dividing or consolidating share capital.
- re-denomination of shares.
- reconversion of stocks into shares.
What is increase capital?
An increase in capital is a method of company financing that consists of increasing its own company funds by increasing its capital stock.
How to issue shares – step by step
- 1 Provide the applicants with a form of application. …
- 2 Shares are allotted via board resolution. …
- 3 Issue share certificates to those who have been allotted shares. …
- 4 Complete a return of allotments via form SH01 to Companies House.
You may need a special resolution to change your company’s share structure. This includes if you: change the number of shares the company has and their total value – this is your ‘share capital’ (the part of your company’s money that comes from shares) … change (‘denominate’) your shares into other currencies.