When a company is in the path of growth, its size of the operation increases. The business operations, manpower, projects increase with the growth of the company. In such cases for the expansion of the business, the expenditure requirements become greater in size and the need of funds becomes an important issue. These monetary needs can be fulfilled by increasing the authorized share capital of the company. The maximum amount of shares that are allocated to the shareholders is the authorized share capital.
When the company goes through this crisis of funds, the company can increase the authorised share which requires of passing a special resolution in the General Meeting as per the Companies Act, 2013 and subject to confirmation by ROC.