How To Increase Capital In Private Joint Stock Companies

By Author: hassantirbakhsh
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According to Article 161 of L.A. Trade Law and its notes, the Extraordinary General Assembly decides on the capital increase of Etihad Company upon the proposal of the board of directors after reading the report of the inspector or inspectors of the company.
The extraordinary general meeting that decides on the capital increase determines the conditions for the sale of new shares and the payment of its price or assigns the authority to determine it to the board of directors.
Capital increase in a private joint stock company
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The proposal of the board of directors regarding the capital increase must include the justification of the need for the capital increase and also include a report on the company's affairs since the beginning of the current financial year, and if the general assembly has not made a decision on the accounts of the previous financial year by that time, it should indicate the state of the company since the beginning of the year. If the financial year is earlier, the report of the auditor or auditors must include an opinion on the proposal ...
... of the board of directors.

The proposal of the board of directors regarding the capital increase must include the justification of the need for the capital increase and also include a report on the company's affairs since the beginning of the current financial year, and if the general assembly has not made a decision on the accounts of the previous financial year by that time, it should indicate the state of the company since the beginning of the year. Financially, the report of the auditor or auditors must include an opinion on the proposal of the board of directors.
The extraordinary general meeting can authorize the board of directors to increase the capital of the company up to a certain amount in one of the ways mentioned in the commercial law, within a certain period that should not exceed five years.
The company's articles of association cannot include the authority to increase capital for the board of directors.

As long as the previous capital of the company has not been fully paid, the increase of the company's capital will not be allowed under any circumstances.
In private joint-stock companies, after making a decision regarding the capital increase through the issuance of new shares, the details should be notified to the shareholders through the publication of an advertisement in a widely circulated newspaper in which advertisements related to the company are published. In this advertisement, information about the amount of the capital increase and the nominal amount of the new shares and, depending on the case, the amount of the additional value of the share and the number of shares that each shareholder has the right to buy, and the deadline for subscription and the method of payment. If special conditions are considered for new shares; The nature of these conditions will be stated in the advertisement (Articles 169 and 168 of the Commercial Law).

Necessary documents for registering capital increase in a private limited company
In order to register capital increase in private joint stock companies, it is necessary to submit a statement with the following documents attached to the company registration authority:
1. Minutes of the extraordinary general meeting that approved the capital increase or authorized it to the board of directors, and in the recent case, the minutes of the board of directors meeting that approved the capital increase.
2. A copy of the newspaper in which the advertisement mentioned in Article 196 LA of the Trade Law was published.
3. Declaration of approval for the sale of all new shares, and if the new shares have privileges, the description of the privileges and their reasons must be stated in the declaration;