The authorized capital is the supreme amount of capital which a Company can distension through the issue of shares to its shareholders. Authorized share capital is described in the Memorandum of Association of the Company. The company can raise capital up to this amount.
But a company may, during its course of business manupulation, need additional capital for elaboration, meets working capital requirements etc. An enhancement in authorized capital is required for issuing new shares and inducting more capital into the company.

This process is difficult and time taking as it requires, permissions of the Registrar of Companies (ROC) and other filing requirements.