The authorized share capital determines the maximum number of shares a private business can issue. As per the 2013 New Companies Act, there is no minimum capital increase requirement. To issue additional shares or increase the authorized share capital, the board updates the capital clause of the Memorandum of Association by approving an ordinary resolution.

The amount of authorized share capital increase varies from one business to another and can be altered, but only with the consent of shareholders. For example, if a company has an authorized capital of ₹2 lakhs, it can issue shares up to ₹2 lakhs. However, this allowed capital can be adjusted as needed. If a company currently has ₹1 lakh in allowed capital, but an investor wants to invest ₹1 crore, the company can increase its authorized capital to ₹1 crore. The flexibility to adjust authorized share capital is essential for company registration and is governed by the provisions outlined above.