As per section 61 of the Companies act, 2013 a limited company having a share capital may, by passing an ordinary resolution in a general meeting, alter the capital clause of its Memorandum of Association, provided authority to alter is given to it by its Articles of Associations. Each business needs more funds over time to run business. These funds can be required on a long- and short-term basis. A short-term need can be satisfied by taking loans and advances. But for the run, the company will require more funds. For a Private Limited Company, this can be done by increasing the authorized capital of the company. Since the private limited company is governed and regulated under the Company Act to make changes in the structure it is necessary to follow the Act and the rules stated.
While registering the Private Limited Company the authorized and paid-up capital is specified in the MOA of the company. The company can therefore issue new shares within the limit of the authorized capital mentioned in the MOA. If the company wishes to issue more shares than the limit that is specified then amendments need to be done in the MOA. A notice of alteration is required to be filed with the ROC in Form No. SH-7 within 30 days.