Change of Authorised Capital
Learn how to increase or decrease authorised share capital and understand its effects
Overview
The Change of Authorised Capital feature allows you to increase or decrease the maximum amount of share capital that a company is permitted to issue. The authorised share capital represents the maximum amount of share capital that can be issued, as set out in the company's memorandum of association.
A change in authorised capital increases or decreases the company's total available capital while maintaining the nominal price per share. The total number of authorised shares adjusts proportionally to the updated authorised capital.
What you'll learn:
- How to increase or decrease authorised capital in the platform
- The effects of changing authorised capital on share classes
- How the platform handles certificate re-issuance (optional)
- The difference between authorised capital and issued capital
Performing a Change of Authorised Capital
Step 1: Navigate to Capital Actions
- Go to Certificates in the sidebar
- Select Share Classes and open the share class you want to update
- Scroll down to the Capital Actions section
- Click Add Capital Action
Step 2: Select Action Type
From the Action Type dropdown, choose Increase/Decrease Authorised Capital.
Step 3: Enter Details
Enter the following information:
- Authorized Capital: Enter the new authorised capital amount
- For increase: Enter a value higher than the current authorised capital
- For decrease: Enter a value lower than the current authorised capital
- Nominal Price: Confirm or adjust the nominal price (if applicable)
- Effective Date: Choose the effective date of the action
Important
If entering a past date, ensure there are no capital actions, issuances, or transactions recorded after that date. The effective date must be the latest transaction in the capital history to preserve chronological accuracy.
Step 4: Configure Certificate Re-Issuance (Optional)
The platform can optionally re-issue certificates of the share class. Review the preview to see how certificates will be updated.
Tip
Certificate re-issuance is optional when changing authorised capital. This allows you to update certificates to reflect the new authorised capital structure.
Step 5: Review and Confirm
- Review the new authorised capital amount carefully
- Verify the impact on the number of authorised shares (shown in the preview)
- Check that the nominal price is correct
- Confirm the effective date
- Review certificate re-issuance settings (if applicable)
- Click Create to confirm and record the change
The authorised capital change has been recorded. The share class now reflects the new authorised capital, and the number of authorised shares has been adjusted proportionally.
Understanding Change of Authorised Capital
A change of authorised capital alters the maximum amount of share capital that can be issued by the company. This affects the total available capital while maintaining the nominal price per share.
Increase of Authorised Capital
When you increase authorised capital:
- Authorised Capital Increases – The maximum capital that can be issued is raised
- Number of Authorised Shares Increases – The maximum number of shares that can be issued increases proportionally
- Nominal Price Remains the Same – The par value per share stays unchanged
- Issued Capital Unchanged – Currently issued shares are not affected
- More Shares Available – The company can now issue more shares up to the new authorised limit
Decrease of Authorised Capital
When you decrease authorised capital:
- Authorised Capital Decreases – The maximum capital that can be issued is reduced
- Number of Authorised Shares Decreases – The maximum number of shares that can be issued decreases proportionally
- Nominal Price Remains the Same – The par value per share stays unchanged
- Issued Capital Must Not Exceed New Limit – The new authorised capital must be at least equal to the currently issued capital
- Fewer Shares Available – The company can issue fewer shares up to the new authorised limit
Key Effects
- Authorised Shares Adjust Proportionally – The number of authorised shares changes based on the new authorised capital and nominal price
- Issued Shares Unaffected – Currently issued shares remain unchanged
- Share Class Updated – The share class reflects the new authorised capital limit
- Company Records Updated – Capital history, registers, and filings are updated to reflect the change
Practical Examples
Important
When decreasing authorised capital, ensure the new authorised capital is at least equal to the currently issued capital. The platform will validate this before allowing you to proceed.
What Happens Next
After completing a change of authorised capital:
- The share class shows the new authorised capital amount
- The number of authorised shares is updated proportionally
- The capital history is updated to reflect the change
- Company records, registers, and filings are updated to remain consistent
- Certificates are optionally re-issued (if you enabled this option)
- The transaction appears in the capital actions history
Next Steps
After changing authorised capital, you may need to: - Review the updated authorised capital and share limits - Verify that issued capital does not exceed the new authorised limit (for decreases) - Check that certificates have been re-issued correctly (if applicable) - Review and update any related documentation that references authorised capital - Verify that the capital history is chronologically accurate
Related Topics
- Capital Actions Overview – Learn about other capital actions you can perform
- Setting up Share Classes – Understand how share classes work
- Share Split – Learn how to change share quantities while maintaining total capital
- Change Nominal Price – Learn how to change the nominal value per share
- Cap Table – View how authorised capital changes affect available share capacity