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Doubt about authorized capital and further issue of shares


Prathyush.P.G. (Derivative analyst and CA Coaching )     25 September 2011

Prathyush.P.G.
Derivative analyst and CA Coaching  
 5 likes  179 points

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If profit and loss account exists in Asset side of the balance sheet in a private limited company,will that effect increase of authorized capital and further issue of shares ? kindly reply,if possible quote the sections or range of sections that will be applicable here 

thanks in advance :) 

avater

ARUN KUMAR (Financial Consultant )     26 September 2011

ARUN KUMAR
Financial Consultant  
 57 likes  992 points

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NO. ABOVE ARE NOT CORRECT.

avater

Alan Angels Augustine (STUDENT PCC)     26 September 2011

Alan Angels Augustine
STUDENT PCC 
 5 likes  62 points

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Authorized capital of a company as per the companies act 1956, is the maximum capital that a company can raise by issue of shares, which will be mentioned in AOA. Alteration of authorized capital is possible only by passing sepcial resolution with the members and registration of the same with the ROC.

So If profit and loss account exists in Asset side of the balance sheet in a private limited company,  that will not effect increase of authorized capital and further issue of shares.


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