Increse working capital of the company

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Dear seniors,

Please help me with your expertise:

A Private Limited Company Authorized Capital & Paid Up Capital of which is 5, 00,000. The details of structure are as such:

1.      Authorized Capital: 5,00,000

2.      Paid Up capital :  5,00,000

3.      No. of Members: 4

4.      No. of shares to each member: 12, 500

5.      Status of the members: 2 as Director & 2 as shareholder

The Company is raising funds as in following cases:

1.      An investor will invest 6, 00,000. Company wants him as Director also.

2.      Another investor will invest 10, 00,000. Company need the investment but do not want to be included into board/ shareholding

3.      3rd investor will invest 25, 00,000. He will be a shareholder.

4.      One of the existing shareholder will invest 10,00,000 but company do not want to increase the no. or % of his share

Now please suggest for the above mentioned cases with reference to the below mentioned scenarios:

1.       Do we need to increase the Authorized/ Paid up Capital for the investor 1?

2.       For the 2nd investor what are the options available?

3.       What is the process to include the 3rd investor?

4.       What is the process for the existing shareholder giving more funds?

Regards,

Replies (1)

As your companie's authorized and paid capital is equal you will need to increase your authorised capital for alloting more shares to investors.

A director need not to be a shareholder of the company unless there is a provision in your MOA of qualification shares. So no need for increase in share capital for investor 1.

Second investor can lent money as loan whether secured o unsecured.

If you want third investor as a shareholder than u will need to increase the capital as all your authorised capital has been issued.

I guess shareholder can give loan to the company. U can take his investment as loan in your company. I m not so sure abt this matter. Wait for others suggestions.

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