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Authorised capital

Rani Pradeep Kumar (Proprietor) (35 Points)

24 November 2011

What are the key deciding factors to decide on the amount of Authorised Capital for a Pvt Ltd company.

Name criteria like using words " Manufacturing, corporation etc : has its limitations on the figures of authorised capital. But other than these what all things should be considered - like capital intensive business / service oriented business which requires less capital .., whether there is any regulation governing the authorised capital figures other than name.

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5 Replies

Krishna Chandra Mohanta (Company Secretary) (54 Points)
Replied 24 November 2011

As per my concern the Authrised Capital of the Company depends upon the words as u have mentioned at the begining or anywhere in between the name.

Rani Pradeep Kumar (Proprietor) (35 Points)
Replied 24 November 2011

What if the company needs an investment of say Rs.50 lakhs or more to start the business, then , in that case A.C is only Rs.100000/-, which means the rest is going to come through "loans" from directors or their relatives .. Will that be ok?? or is there any law which says that certain percentage of investments should be from capital for a pvt ltd co and not from directors ??

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 24 November 2011

Key words in the Name of a Company	Minimum Authorised Capital Required
Corporation	5 Crores
International, Globe, Global , Universal, Universe, Continental, Inter- Continental, Asiatic, Asia, Asian, World Being the first part of the name	1 Crore
Hindustan, Hindustani, Hindustanee, India, Indian, Bharat, Bharatati, Bharatiya, Bharateeya Being the first word of the name	50 Lacs
If any of the key words as above is used within the name(with or without brackets)	5 Lacs
Industries, Udyog, Industrial, Industry	1 Crore
Enterprises, Enterprise, Products, Product Business, Manufacturing, Manufacture	10 Lacs

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Rani Pradeep Kumar (Proprietor) (35 Points)
Replied 24 November 2011

I wanted to know if there is any other criteria other than name to decide on the authorised capital figure ??

Charu Srivastava (Company Secretary) (4210 Points)
Replied 24 November 2011

Authorised Capital is the maximum Capital which the Company is authorised to raise by issuing Shares.It is on this amount the Company has to pay prescribed fees at the time of registration.

Therefore the Authorised Capital should be fixed keeping in mind

1). Companies ability to pay the Fees at the time of Registeration which is quite high.

2). fund requirement of the Company so that it can raise through Shares.

3). Factors mentioned by Mr. Ankur

Thanks and Regards

Charu