Most Start-ups which select the option of being as a Private Limited Company, for its financial flexibility, start operation with 1 Lakh as authorised capital. As the business grows, they can infuse more funds into their business by issuing shares to the existing promotors or to new shareholders. However to do so the company needs to amend capital clause in Memorandum of Association by passing the ordinary resolution of the shareholders.
Issuing shares to existing promotors
Board Meeting needs to be called for issuing shares to present shareholder. Then file PAS-3 with the Registrar of Companies (ROC) intimating allotment to a registrar.
Issuing shares to new shareholders
Issuing shares to new shareholders necessitates a valuation report from a Marchant Banker or Chartered Accountant.