Authorisation in Article is must for Increase

For Increase in Authorise Share Capital, the company has to make sure that its Articles of Association contain a provision authorising it to increase its authorized share capital. Reason being Section 61 of the Companies Act, 2013, mandates that for increasing the Authorised share capital, authorization in Articles of Association is a pre-condition.
In other words Company has to make sure that its Articles of Association contain a provision authorising it to increase its authorised share capital.
So first check whether there is enabling provision in the Articles of Association regarding increase in authorised share capital.

Calling of Board Meeting

Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors. Main agenda for this Board meeting would be:

• To Get in-principal approval of Directors for Increase in authorised share Capital;
• Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of shareholders, by way of Ordinary Resolution, for amendment in authorised share Capital clause of Memorandum of Association. This amendment in authorised share Capital clause of Memorandum of Association shall be in accordance with the requirement of section 61 of the Companies Act, 2013;
• To approve notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013;
• To authorise the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board under clause 2(c) mentioned above.

Issue Notice of the Extra-ordinary General meeting (EGM)

To all Members, Directors and the Auditors of the company in accordance with the provisions of Section 101 of the Companies Act, 2013;

Holding of General Meeting

Hold the Extra-ordinary General meeting (EGM) on due date and pass the necessary Ordinary Resolution under section 61(1)(a) of the Companies Act, 2013, for increase in authorize share capital of the Company.

ROC Form filing

File form SH-7 within 30 days of passing of Ordinary Resolution with the concerned Registrar of Companies, with prescribed fees and along with following attachments as desired by section 64:

• Notice of EGM;
• Certified True copy of Ordinary Resolution;
• Altered Memorandum of Association.

Concerned Registrar of Companies (ROC) will check the E-forms and attached documents and will approve the increase in authorize share capital.

Notice to be given to Registrar for alteration of share capital

As per section 64 of the Companies Act, 2013, where a company alters its share capital for increase in authorised share capital in accordance with sub-section (1) of section 61, the company shall file a notice in the prescribed form with the Registrar within a period of thirty days of such increase along with a copy of altered Memorandum.

No need to pass Special Resolution for increase in authorised share capital

Amendment in capital clause of Memorandum of Association for the purpose of increase in authorised share capital is exclusively governed by Section 61of the Companies Act, 2013 and section 61 is silent about the nature of shareholders’ resolution. So in the above scenario an Ordinary Resolution would be enough for increase in authorised share capital.