Corporate Compliance · Capital Increase
Increase in authorized capital stock
Room for new investment. We structure your capital increase and take it through approvals and SEC filing.
Overview
Making room for new capital
Authorized capital stock is the ceiling on the shares your corporation can issue. When you need to bring in new investment, admit a new shareholder or meet a capital requirement above that ceiling, the articles must be amended to increase it, with SEC approval.
The Revised Corporation Code requires approval by a majority of the board and by stockholders representing at least two-thirds of the outstanding capital stock. At least 25% of the increase must be subscribed, and at least 25% of that subscription paid, in cash or in property. The documentation differs for each form of payment, and we prepare it for whichever you use.
What we handle
Capital increases, structured properly
From planning to newly issued shares.
Capital planning
The increase sized for your investment and ownership plans.
Approvals and subscription
Resolutions secured and subscriptions documented.
SEC application
The amendment filed with the treasurer's certificate and proof of payment.
Post-approval steps
Shares issued, books updated, taxes settled and the GIS updated.
How it works
How the increase works
Four stages from plan to approval.
Planning
The size of the increase and the subscription structure agreed.
Approvals
Board and stockholder resolutions prepared and signed.
Subscription and payment
Subscriptions documented and the required payment made.
SEC filing and issuance
The amendment filed, approved and the new shares issued.
Estimated timeline
Within 60 Days from completion of documentary requirements
Timelines are estimates and depend on complete documents and government agency processing.
Why increase capital with ILA
Structured for the deal
The increase sized around your investment, not a template.
Rules met first time
Subscription and payment documented to SEC requirements.
Carried through
Issuance, books and GIS updated after approval.
Frequently asked questions
Capital increase questions, answered
What is the 25% rule?
At least 25% of the increase in authorized capital stock must be subscribed, and at least 25% of the subscribed amount must be paid, before the SEC approves the increase.
Can we pay in property instead of cash?
Yes. Property can be used for payment, but it requires a valuation acceptable to the SEC and additional documentation, so it takes more preparation than cash.
Does increasing authorized capital satisfy minimum capital requirements?
Not by itself. Minimum capital requirements, such as those for foreign-owned domestic market enterprises, look at paid-in capital. Increasing authorized capital makes room for that investment, and we structure both together where needed.
Bringing new capital into your company?
Book a free consultation and we will structure the increase and handle the filing.
