Increase Paid-Up Capital
Increase Paid-Up Capital
Paid-up share capital (also called further issue of share capital) is the amount of money a company has received from shareholders in exchange for issued shares. A company that is fully paid-up has sold all available shares—and when additional funds are required, the company may increase its paid-up share capital.
Whether you are a private limited company or a public limited company, raising paid-up capital provides the working capital, investor confidence, and financial flexibility needed to scale operations and meet business needs.
Top Reasons to Increase Paid-up Share Capital
Investor Funding – Startups and growing businesses often require investor funds to develop products, test new markets, or launch pilots. Paid-up capital can be increased via private placement from angel or institutional investors.
Working Capital Needs – Healthy working capital is essential for smooth operations. Increasing paid-up capital helps strengthen financial stability.
Purchase of Assets – Expansion often requires investment in machinery, vehicles, or infrastructure. Paid-up capital provides the means to finance these purchases.
Starting New Business Along with Existing – New ventures need substantial funding. Paid-up capital allows access to funds beyond self-financing.
Business Growth – For scaling sales, hiring staff, moving into new premises, or expanding internationally, increased paid-up share capital is crucial.
Key Benefits of Increasing Paid-Up Capital
- Business Growth:-By raising paid-up capital, you strengthen your company’s financial base, avoid excess debt, and create room for expansion to support long-term growth.
- Innovation & New Opportunities:-With higher capital, your company becomes more adaptable and can invest in R&D, innovation, and new product development, giving you a competitive edge.
- Stay Ahead of Competition:-Additional capital enables your business to compete effectively with rivals, adopt new technologies, and expand market share with ease.
- Adapting to Changing Ecosystem:-Markets evolve rapidly—having more capital ensures your company can pivot quickly, meet consumer demands, and remain sustainable in a fast-changing environment.
Documents Required to Increase Paid-up Share Capital
When planning to increase paid-up share capital, companies must comply with the legal and procedural requirements under the Companies Act, 2013. Proper documentation and filing with the Registrar of Companies (ROC) are mandatory to validate the allotment of shares.
Mandatory Documents & Compliance Checklist
After allotment or capital increase, verify the following:
Board/Shareholders Resolution approving the increase in issued/subscribed share capital, duly filed with MCA.
E-Form PAS-3 (Return of Allotment) filed with proper attachments.
Share Certificates Issued (in prescribed format – Form SH-1).
Entries in Register of Members (MGT-1) updated.
Entries in Books of Accounts properly recorded.
Procedure to Increase Paid-up Share Capital
When a company decides to increase its paid-up share capital, it must follow the procedure prescribed under the Companies Act, 2013. The capital increase may take place through:
Right Issue
Bonus Issue
Private Placement
Conversion of Loan/Debenture into Share Capital
Step 1: Hold Board Meeting & Call for EGM
Approve the issue of an offer letter to identified persons for allotment of shares (subject to shareholder approval).
Give notice for Extraordinary General Meeting (EGM) for approval of private placement.
Step 2: Call an EGM & Pass the Special Resolution
Pass the special resolution approving the private placement.
Approve the Private Placement Offer Letter in Form PAS-4.
Step 3: Filing of MGT-14
File Form MGT-14 for the special resolution within 30 days (if applicable).
File another MGT-14 for approval of the offer letter (within 30 days).
Step 4: Hold Another Board Meeting
Make the allotment of shares to identified persons.
Step 5: Reporting to ROC
File Form MGT-14 for issue of securities (if required under Section 117).
File Form PAS-3 for Return of Allotment within 30 days.
Frequently Asked Questions
A company name search ensures that your chosen business name is unique, legally compliant, and not already registered with Companies House UK. It helps you avoid legal disputes, trademark issues, and confusion in the Cardiff business market.
If your desired name is already registered, you’ll need to choose a different name or modify it. Using a taken name could result in rejection by Companies House or potential legal issues. Our experts can help you brainstorm alternative names that are compliant and market-ready.
It’s not advisable to use a name that’s too similar to another company, especially within the same industry. Similar names can confuse customers and risk trademark disputes. A company name search helps you identify these risks early.
For a company name search in Cardiff, you may need:
Proposed company name
Business entity type (Ltd, LLP, Partnership, etc.)
Jurisdiction (Cardiff / UK)
Owner or shareholder details (if applicable)
Business description
A “high probability” result means your proposed company name is likely to be available, but further checks are recommended. This is why our detailed Cardiff Company Name Search Report includes both identical and similar names for clarity.
Certain words are restricted under UK law (e.g., “bank,” “insurance,” “government”). If you want to use them, you’ll need special approval from regulatory bodies. We guide you through this process if your Cardiff business requires such terms