Authorized share capital is the maximum number of shares that a company can issue to raise money. It is stated in its memorandum of association. Authorized share capital can be increased by altering its memorandum of association by passing a resolution in the general meeting. A company prescribes each class of shares and their respective nominal value that it is authorized to issue in its memorandum.

e.g. : Company XYZ has an authorized share capital of 100,000 share with a nominal value of Rs 10 each. In this case it can issue a maximum of 100,000 share only until it alters its memorandum to a higher number.

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