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Regulatory Requirements and Compliance
Board Approval
The process begins with obtaining approval from the company's board of directors. This decision must be documented in the minutes of the board meeting.
Shareholder Approval
The proposal to increase authorised capital must then be presented to the shareholders. A resolution must be passed in a general meeting, typically requiring a special majority.
Filing with Regulatory Authorities
After securing shareholder approval, the company must file the necessary documents with the relevant regulatory authorities, such as the Registrar of Companies (RoC) in many jurisdictions. This typically includes:
A copy of the resolution passed by the shareholders
Amended memorandum and articles of association
Prescribed forms and fees
Fees Associated with Increasing Authorised Capital
Government Fees
Government fees for increasing authorised capital vary by jurisdiction and the amount of the increase. These fees can be structured in several ways:
Fixed Fee: Some jurisdictions charge a fixed fee for any increase in authorised capital.
Variable Fee: More commonly, the fee is variable and calculated as a percentage of the increase in authorised capital. For instance, a company might be required to pay a certain fee for every unit of currency by which the authorised capital is increased.
Stamp Duty
In addition to government fees, companies may be required to pay stamp duty on the increase in authorised capital. Stamp duty rates vary by jurisdiction and can significantly impact the overall cost.
Professional Fees
Professional fees include charges by legal advisors, accountants, and company secretaries who facilitate the process of increasing authorised capital. These professionals assist with drafting resolutions, filing documents, and ensuring compliance with all regulatory requirements.
Miscellaneous Fees
Other potential fees include administrative charges for updating company records and publications, as well as costs associated with holding the necessary general meetings.
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