How to Increase the Authorized Capital of an OPC

How to Increase the Authorized Capital of an OPC

One Person Company (OPC) is a popular choice for entrepreneurs who want to start their own business with limited liability. However, as the business grows, the need to increase the authorized capital may arise. Here's a step-by-step guide on how to increase the authorized capital of an OPC:

1. Check the Articles of Association

The first step is to check the Articles of Association of the OPC. The AOAs typically contain information regarding the authorized capital of the company and any provisions related to increasing it. Make sure to comply with the provisions mentioned in the AOAs.

2. Board Resolution

Hold a board meeting to pass a resolution for increasing the authorized capital of the OPC. The resolution should mention the exact amount by which the authorized capital is to be increased and any other relevant details.

3. File Form MGT-14

File Form MGT-14 with the Registrar of Companies (RoC) within 30 days of passing the board resolution. This form contains details of the resolution passed for increasing the authorized capital of the OPC.

4. File Form SH-7

File Form SH-7 with the RoC within 30 days of passing the board resolution. This form contains details of the increase in authorized capital, such as the new authorized capital amount and the date of approval.

5. Pay the Fees

Pay the requisite fees for increasing the authorized capital of the OPC. The fees may vary depending on the amount by which the authorized capital is being increased.

6. Receive Approval

After filing the necessary forms and paying the fees, the RoC will review the documents and approve the increase in authorized capital. Once approved, the OPC can issue new shares to reflect the increased authorized capital.

7. Update Records

Ensure that all records and documents, such as the Memorandum of Association, share certificates, and registers, are updated to reflect the increased authorized capital of the OPC.

8. Inform Authorities

Inform other relevant authorities, such as the Income Tax Department and GST authorities, about the increase in authorized capital of the OPC to ensure compliance with all regulations.

9. Compliance

Finally, ensure ongoing compliance with all regulatory requirements related to the increased authorized capital of the OPC. This includes maintaining proper records, filing annual returns, and fulfilling any other obligations as per the Companies Act.

Increasing the authorized capital of an OPC is a relatively straightforward process, provided all the necessary steps are followed correctly. By following the steps outlined above, entrepreneurs can successfully increase the authorized capital of their OPC and continue to grow their business.