Change In Authorised Capital

Any company in India may wish to increase its authorized share capital before the issuance of new share equity and the paid-up capital. The authorized share capital is the total worth of the shares that an entity can issue, While the paid-up capital is defined as the entire value of the shares that the entity has already issued. The paid-up capital of a company should never exceed the value of authorized capital. Thus if any entity has authorized capital of INR 10 lakhs and the paid-up capital of INR 10 lakhs, it will have to introduce new shareholders. The entities can do so by:

1) Issuing new share and increasing the authorized share capitals or,

2) By transferring the shares from existing stakeholders to new.

Before initiating the steps to increase the authorized share capitals, you must verify your AOA. It will help you ensure there are provisions in the AOA to increase your entity's authorized share capital. If in case, you don't find any such provisions, then you must make changes in the AOA of your company.

Note: most of the AOAs have the facility to increase the authorized share capital

It is essential that an entity must seek approval from its shareholder. So, you have to conduct a general meeting as per the time and date mentioned in the notice. The approval of the stakeholders must be taken in the form of an ordinary resolution.

After seeking the approval from the meetings with the board and stakeholders, you must file form SH-7. This form must be recorded within 30 days of passing the resolution. You also have to pay the prescribed government fee to increase the authorized share capital.

1) Contribution is fixed to the closest rupee for every employee, their share, pension amount, and EDLI contribution.

2) Difference between employee Share and Pension Contribution is The Employer Share.

3) EPF Administrative charges per month are, in general, a minimum of Rs. 500/-.

4) When a venture doesn’t have any member in the month, a nominal administrative charge of 75 INR is applied.

5) Amount per month as per the EDLI Administrative charges is minimum Rs 200/-is payable.

6) When a venture has no member in the month, the least administrative charge applied is Rs. 25/-

7) If a venture is relaxed from PF Scheme, Inspection charges at 0.18% of 5 INR- is payable in place of Admin charges.

8) If a venture is excused under EDLI Scheme, Inspection charges at 0.005%, of at least Re 1/- is payable in place of Admin charges.

Employers prior to making payment for the employees should cut the contribution of the employees from their daily payments. Both the employee and employer share are to be paid to the EPFO, within 15 days of ending every month.

EPF is primarily a scheme regulated under the norms of EPFO act. PF registration is meant for the ventures those having more than 20 employees or more than that, as per specific conditions and relaxations.

PF registration is essential for the ventures having 20 or more employees. Those having under 20 employees would be essential to have PF registration. Each of the employees gets eligibility for PF straight from the day of employment, and the responsibility of reducing the amount is with the employer. 12% PF contribution must be evenly distributed among the employees, as well as the employers. PF cut at 10% is meant for those ventures with below 20 employees.