Authorized Share Capital more usually known as authorized capital is generally the maximum amount of share capital that an organization can give to shareholders. This amount changes from company to company and is likely to change but only with the authorization of investors. Let’s just suppose that a company’s authorized capital is Rupees one lakh then it naturally means that you can issue shares of up to Rupees one lakh. But since this authorized capital is likely to change it can be increased and decreased as and when needed. Let’s suppose that a company’s authorized capital is Rupees 1 lakh but an investor wishes to invest Rupees one Crore, in such a scenario the company can increase its authorized capital to one Crore. Discussed below is approved share capital for company registration.

 Guidelines for authorized capital.

Some words can lead to change in the authorized capital of an organization such as;

  1. Rs. 5 Lakhs for using words like Bharat, Hindustan, India within the name of the organization.
  2. Rs. 10 Lakhs for words like Products, Enterprise, Business, and Manufacturing within the name of the organization.
  3. Rs. 50 Lakhs for words like Global, International, Universal, Asiatic, Continental, Intercontinental, Asian within the name of the organization.
  4. Rs. 50 Lakhs for words like Hindustan, Bharat, India as the first word of the name of the organization.
  5. Rs. 1 Crore for using words like Universal, Global, International, Asiatic, Asia Continental, intercontinental, as the first word of the name of the organization and words like Udhyog and Industry anywhere in the name of the organization.
  6. Rs. 5 Crore for utilizing word Corporation anywhere in the name of the organization.

The process to change the Authorized Share Capital of a company

At least fee of Rs. 5000 is to be paid to MCA if the authorized capital is the least amount of Rs. 1 lakh, As the sum of authorized capital gains the amount of fee needed to be paid to MCA also increases.

  1. For each lakh of additional share Capital, Rs 5 lakh to 50 lakhs; Charges per lakh of authorized is Rs. 3000.
  2. For each lakh of additional share Capital, Rs 1 lakh to 5 lakhs; Charges per lakh of authorized Capital is Rs. 4000.
  3. For each lakh of additional share Capital, Above Rs. 1 Crore; Charges per lakh of authorized Capital is Rs. 750.
  4. For each lakh of additional share Capital, Rs 50 lakh to 1 Crore;  Charges per lakh of authorized Capital is Rs. 1000.

But if we discuss startup entrepreneurs, they require keeping a minimum amount of authorized capital of Rs. 1 lakh to avoid any extra expenses. However big settled organizations tend to keep a high amount of authorized capital to avert repeated intervention of government organizations in their work again and again.

People often get distracted between authorized share capital and given share capital but you require to understand that they are two distinct things. Issued share capital is the sum of capital that is provided by the company’s investors and it can never be more than authorized share capital.

Now that you have a clear accepting of what approved share capital is and how it works for company registration, go and choose a name for your organization keeping in mind the above-mentioned facts.!