How can I inject funds into my own startup every quarter without increasing authorised capital?

How can I inject funds into my own startup every quarter without increasing authorised capital?

There are two ways types of funds, Shareholder’s funds (in case of a company limited by shares) or proprietary funds (in case of a proprietary firm) and debt funds.

The question you asked has following conditions :

> ‘you’ want to inject funds in your own start-up, And

> you don’t want to increase the authorised capital ( well, If I assume it to be a proprietary firm, in that case it will just be named as ‘capital’ and not ‘authorised capital’ and also, if I will assume it to be a company, it shall be ‘paid up capital’ and not ‘authorised capital’.

So, the other way of funding left to you is ‘ debt funds’.

While Elaborating on the ‘Debt Funds’,

If your start up is a company, then you, as a director of the company (you might be most probably) can give loan to the company as per the statue limits governed by Companies Act, 2013. But, If you will increase the limits under this statue, it might result in your disqualification as a director.

Moreover, if you are the proprietor of your start-up firm, you cannot directly inject funds into it as it will be counted as a capital itself. So, in this case, you can take a loan from a relative, either your Mom or Dad or anyone or inject your funds under their name as loan to the firm.

Whereas, In my opinion, if you seek funds for working capital requirement, you shall go for ‘Bank Overdraft’ as it will reduce your operating cost and even for ‘investments in assets’ or other ‘long term investment’, you should take Bank loan, rather than investing your own funds, as it bring an element of ‘Financial Leverage’ in you Business and shall eventually reduce the ‘cost of funds’ in your business.

Hope it helps.


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