K Bhatia (CMD) (24 Points)
05 July 2013In a government company, with an authorised capital of 10 Cr., Govt. has decided to infuse equity capital of Rs. 22 Cr. to partially wipe out the accumulated losses.
Is it necessary to increase authorised capital?
In any case, this fresh equity is getting consumed, since the accumulated losses are above 40 Cr.
Can the company save on the expenditure involved (It costs several lacs of rupees) in increasing the authorised capital?
P C Agrawal
(Registered independent director Past Ch)
(8229 Points)
Replied 05 July 2013
Yes, it is necessary to increase authorised capital. You will have to take approval of High Court u/s 100 for writing off share capital against accumulated loss.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17858 Points)
Replied 06 July 2013
Yes, you need to increase the Authorised Capital as the capital can be issued withing the range of Authorised Capital.
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