Increased Authorized capital

The authorized capital is generally mentioned in the Memorandum of the company. So, to increase such authorized capital, at first the necessary provision of the Memorandum id required to be amended. For this reason, the following procedures are to be followed:

1. Ordinary resolution required: The alternation in the capital clause can be effected by passing an ordinary resolution in the general meeting. The resolution to be passed by the majority of votes (more than 50%). In case of a poll, the provision of sch-I, Reg-61 needs to be followed.
2. Special resolution : Where the Memorandum of the company does not contain any specific provision as to the increase of the authorized capital, a special resolution to this effect is required to be passed with 21 days notice. In this case, the resolution to be passed by a majority of not less than three-fourths of such members entitled to vote as are present by person

PROCEDURE FOR INCREASING AUTHORIZED CAPITAL AND AMENDING ARTICLES OF ASSOCIATION IN BANGLADESH

1. Board Meeting

   A meeting of the board of directors must be convened to consider and approve the proposed increase in authorized capital. Any alterations, including the correction of clerical errors in the Articles of Association, should be discussed. The board must pass a resolution recommending the increase in authorized capital and calling for an extraordinary general meeting (EGM) to approve this change.

2. Consent of Members

   If the increase in authorized capital involves an increase in the pecuniary liability of a member, the member’s consent must be obtained. This step is crucial to ensure that members agree to any changes that might affect their financial obligations.

3. General Meeting (Extraordinary General Meeting - EGM)

4. Convening a General Meeting: An EGM should be called and held to pass a special resolution approving the increase in authorized capital. Adequate notice of the EGM must be given to all shareholders, stating the purpose of the meeting, which includes increasing the authorized capital and amending the Articles of Association if necessary.

5. Validity of Ordinary Resolution: An ordinary resolution cannot be used for amending the Articles of Association concerning authorized capital. A special resolution is required for such amendments.

6. Special Resolution: A special resolution (form VIII) must be passed to approve the increase in authorized capital. This resolution should detail the new amount of authorized capital and authorize the necessary amendments to the Articles of Association to reflect this change. If the special resolution is not passed, the Articles will not be validly altered.

7. Preparation of New Set of Articles (if applicable)

   If the increase in authorized capital necessitates adopting a new set of Articles of Association, details of the changes to key articles should be included in the explanatory statement. If a majority of members reside far from the registered office, simply stating that copies are available for inspection at the office may not be sufficient. Full details should be made accessible to all members.

8. Filing with the Registrar of Joint Stock Companies and Firms (RJSC)

   Once the special resolution is passed, you need to file Form-IV (Increase Share Capital) with the RJSC. This form details the changes in the share capital

   Where the alteration seeks to incorporate an illegal object in the articles, the Registrar may refuse to register the alternation