The authorized capital is the maximum amount of capital which a Company can raise through the issue of shares to its shareholders. Authorized share capital is mentioned in the Memorandum of Association of the company. The company can raise capital up to this amount.
But a company may, during its course of business operation, require additional capital for expansion, meet working capital requirements etc. An increase in authorized capital is required for issuing new shares and inducting more capital into the company.
This process is complicated and time-consuming as it requires permissions of the Registrar of Companies (ROC) and other filing requirements.
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