In the business world, it’s important to have more investment for expansion and grow business substantially. Investment is the key to business growth. An organization can arrange funds by increasing its authorized share capital.
An increase in authorized capital can be possible by issuing new shares and/or infusing more capital into the Company. The common authorized capital of the Company is declared in the Memorandum of Association and is basically Rs. 1 lakh. An organization can increase the authorized capital at any time with the consent of existing shareholders and by fsubmitting additional fee to the Registrar of Companies.
Decision: - It is completely an internal policy of a company to increase authorized capital. There might be many reasons to increase authorized capital like business expansion, to meet business expenditures, to buy the latest technology, to increase operational efficiencies etc.