Increase Authorised Share Capital
To increase authorised capital, a company passes an ordinary resolution in general meeting under Section 61, alters the capital clause of its MoA and files Form SH-7 with the Registrar within 30 days. You need it before you can issue shares beyond your present limit. We draft the meeting papers and file SH-7 on the MCA V3 portal, with the government fee worked out in advance.
What it is
Authorised capital is the maximum share capital your company may issue. It is written in the capital clause of your memorandum of association (MoA). It is a ceiling, not money in the bank. Once your issued shares reach it, the company cannot issue another share until it increases its authorised capital.
The power comes from Section 61(1)(a) of the Companies Act, 2013: a limited company having a share capital may, if its articles allow, alter its memorandum in general meeting to increase its authorised share capital. Section 13’s special-resolution rule for MoA changes starts with “save as provided in section 61”, so an ordinary resolution is enough unless your articles ask for more. The change is then reported to the Registrar of Companies (ROC) in Form SH-7 under Section 64, on the MCA V3 portal.
Authorised vs paid-up capital
| Authorised capital | Paid-up capital | |
|---|---|---|
| What it means | The maximum share capital the MoA allows (Section 2(8)) | The money actually received for shares issued (Section 2(64)) |
| How it goes up | Ordinary resolution under Section 61, then Form SH-7 | Allotment of shares, then Form PAS-3 |
| Brings money in? | No, it only raises the ceiling | Yes, the allottees pay for their shares |
| Limit | Can be raised as often as members approve | Can never exceed authorised capital |
Here is the catch. Picture a Faridabad auto-parts company set up with ₹10 lakh authorised capital, all of it issued to the two founders. A relative now wants to invest. There is no room for even one more share, so the increase and SH-7 come first and the allotment waits.
Who it applies to
Your issued shares have hit the ceiling
A private company, public company or One Person Company limited by shares whose paid-up capital has reached, or nearly reached, its authorised capital.
You are bringing in fresh equity
An investor or the promoters are putting money in as share capital. A young company that has just got Startup India recognition and is lining up its first angel round often starts here.
You are planning a rights issue or placement
A rights issue under Section 62(1)(a) or a private placement under Section 42 has to fit inside the authorised capital.
Why it matters
Shares cannot go past the ceiling
Without the increase, the allotment cannot go ahead and the investor’s money cannot become equity.
Your MCA record has to match
Banks and investors read your capital from MCA master data. An increase passed at a meeting but never filed in SH-7 does not show up there.
The fee grows with the jump
The ROC fee is charged on the difference between the old and new authorised capital. In practice, one increase covering this year’s and next year’s allotments costs the same fee as two smaller steps under the same table, and saves a second meeting.
Documents required
What we need from you
- Current MoA and articles of association (AoA)
- Valid digital signature certificate (DSC) of a director
Meeting papers we draft
- Board resolution calling the general meeting
- Meeting notice with explanatory statement (Section 102)
- Shorter-notice consents, if needed
- Certified copy of the ordinary resolution
- Altered MoA with the new capital clause
- Altered AoA and the special resolution, if the articles change
For the allotment that follows
- Names, PAN and addresses of the proposed allottees
- Bank proof of the share application money
- Rights offer letter or private placement offer letter
How it works
Check the articles and the current limit
We confirm your AoA authorises an increase under Section 61 and pull your present capital from MCA records. If the articles are silent, we add a special resolution under Section 14 to the same meeting.
Hold the board meeting
The board approves the new capital clause and the notice calling the EGM.
Pass the ordinary resolution at the EGM
Members pass the ordinary resolution at an EGM, or at the AGM if one is due. In a family company where every member signs the shorter-notice consent, the EGM can happen within days.
File MGT-14 if you passed a special resolution
The ordinary resolution under Section 61 does not go in MGT-14. A special resolution altering the articles does, within 30 days under Section 117. File it before SH-7.
File SH-7 on the MCA V3 portal
Within 30 days of the meeting, we attach the certified resolution and the altered MoA (and AoA, if changed), pay the fee and stamp duty online, and sign with a director’s DSC.
Allot the shares and file PAS-3
Once the higher limit shows in MCA records, the company allots shares by rights issue or private placement and files PAS-3. The new capital then carries into your annual ROC filings.
Timelines
Give 21 clear days’ notice
A general meeting needs at least 21 clear days’ notice under Section 101(1). Shorter notice works if a majority in number of members holding at least 95% of the paid-up share capital consent. A private company’s articles can provide otherwise.
File SH-7 and MGT-14 within 30 days
SH-7 is due within 30 days of the resolution under Section 64(1). If a special resolution was also passed, MGT-14 is due within 30 days under Section 117.
File PAS-3 within 30 days of allotment
The return of allotment in PAS-3 is due within 30 days of allotment under Section 39(4) read with Rule 12. For a private placement, Section 42 cuts this to 15 days, and the shares must be allotted within 60 days of receiving the application money.
What happens if you file late
The fee climbs every month
A late SH-7 for an increase attracts an additional fee of 2.5% of the fee for each month of delay, up to six months. After that it is 3% a month.
A daily penalty can run
Under Section 64(2), the company and every officer in default are liable to ₹500 for each day of default, up to ₹5 lakh for the company and ₹1 lakh for each officer.
A missed MGT-14 costs extra
If a special resolution was passed and not filed, Section 117(2) adds ₹10,000 plus ₹100 a day, up to ₹2 lakh for the company and ₹50,000 for each officer in default.
Frequently asked questions
Is an ordinary or special resolution needed to increase authorised capital?
An ordinary resolution is enough. Section 61(1)(a) allows the increase in general meeting, and Section 13 keeps Section 61 changes outside its special-resolution rule for the MoA. You need a special resolution only if the articles must first be amended to give the power, or if they ask for one. If your articles already carry the power, one ordinary resolution does the job.
Do we need to file MGT-14 for an increase in authorised capital?
Not for the increase itself. MGT-14 covers special resolutions and the other items in Section 117(3), and an ordinary resolution under Section 61 is not one of them. If the same meeting passes a special resolution to alter the articles, file that in MGT-14 within 30 days, before SH-7. Check the articles first; that decides whether you file one form or two.
What is the time limit for filing SH-7?
You have 30 days from the date of the resolution. Section 64(1) requires the company to file Form SH-7 with the Registrar, with the altered memorandum attached, once it alters its capital under Section 61. The form goes in on the MCA V3 portal with the ROC fee and stamp duty. File inside the window and you pay only the normal fee.
How is the ROC fee for increasing authorised capital calculated?
It is the fee on your new authorised capital minus the fee on your existing capital, under the table in the Companies (Registration Offices and Fees) Rules, 2014. For companies other than OPCs and small companies, it starts at ₹5,000 for the first ₹1 lakh, then charges ₹400, ₹300, ₹100 or ₹75 per ₹10,000 by band. OPCs and small companies use a lighter table. We give you the exact figure before the meeting.
Is stamp duty payable on an increase in authorised capital in Haryana?
Going by MCA’s state-wise stamp duty table, no: it shows nil duty on SH-7 for a Haryana company with share capital. Stamp duty follows the state of your registered office and is paid online with the form. Delhi, by contrast, charges 0.15% of the increase, up to ₹25 lakh. So for a Faridabad company, the main government cost is the ROC fee.
Can the board increase authorised capital on its own?
No. The board can only propose it. Section 61 needs shareholders’ approval in a general meeting, so the board approves the notice and calls an EGM, or adds the item to the AGM. The meeting needs 21 clear days’ notice unless members agree to shorter notice. In a closely held company, that consent is usually easy to collect.
Does increasing authorised capital bring money into the company?
No. It only raises the ceiling; your bank balance does not move. Money comes in when the company allots shares, through a rights issue under Section 62(1)(a) or a private placement under Section 42. That allotment raises paid-up capital and is reported in PAS-3 within 30 days, or 15 days for a private placement. Think of SH-7 as making room and PAS-3 as filling it.
What happens if SH-7 is filed late?
You pay an additional fee and risk a penalty. The additional fee is 2.5% of the fee for each month of delay up to six months, and 3% a month after that. Section 64(2) also allows a penalty of ₹500 a day, up to ₹5 lakh for the company and ₹1 lakh for each officer in default. File as soon as you spot the gap and both stay small.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
The ROC fee is the fee on your new authorised capital minus the fee on your existing capital, under the Companies (Registration Offices and Fees) Rules, 2014:
| Band of authorised capital | Fee for that band (companies other than OPCs and small companies) |
|---|---|
| First ₹1 lakh | ₹5,000 |
| ₹1 lakh to ₹5 lakh | ₹400 per ₹10,000 |
| ₹5 lakh to ₹50 lakh | ₹300 per ₹10,000 |
| ₹50 lakh to ₹1 crore | ₹100 per ₹10,000 |
| Above ₹1 crore | ₹75 per ₹10,000 (total fee capped at ₹2.5 crore) |
For example, moving from ₹10 lakh to ₹50 lakh costs ₹1,20,000 (₹1,56,000 less ₹36,000). OPCs and small companies pay ₹2,000 up to ₹10 lakh and ₹200 per ₹10,000 between ₹10 lakh and ₹50 lakh, so the same move costs them ₹80,000.
Stamp duty follows the state of your registered office and is paid online with SH-7. For a Haryana company, MCA’s table shows nil duty on SH-7; Delhi charges 0.15% of the increase, up to ₹25 lakh.
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Ready to begin?
Tell us your present and target authorised capital, and we will give you the exact ROC fee and file SH-7 well inside the 30 days.