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Every company whether it’s private or public needs fund to run and expand its business. There are two ways to obtain funds – either through loan or through issue of share capital. It is usually better to issue shares to raise fund from a long term perspective.
A company can issue shares up to a maximum limit of authorized share capital, which is specified in the MOA during the time of registration. If the company wants to issue shares beyond such limit then the company will have to increase the authorized share capital by amending the MOA during an AGM/EGM.