The authorized capital of a company means the number of shares of a Company can issue to its shareholders. It is a maximum value of securities that a company can legally issue. The number is specified in the Memorandum of Association. When any company is Incorporated but can be changed or increased later with shareholder’s approval.
For I Share Capital, the company has to make sure that its Articles of Association contain a provision authorizing it to increase its Authorized Share Capital. Most of the companies start their business with the minimum capital of Rs. 1 lakh. But, to start any kind of business at the best level the capital requirement is more than 1 lakh. However, for this, you have to raise or share your company’s capital. In order to maintain financial decorum, The Government lay down that no one can increase their capital by using their shares without any reason.
