Increase in Authorised Share Capital
Corporate Compliance
Increase in Authorised Share Capital — Form SH-7 Filing in India
Your company can issue shares only up to its authorised share capital. In short, you must raise this ceiling before a fresh allotment or funding round. However, the resolutions, MOA change, and stamp duty must be exact. Therefore, Prospect Legal handles your increase in authorised share capital end to end.
10+
Years in Legal Practice
Section 61
Companies Act 2013
Form SH-7
Filed in 30 Days
End-to-End
Resolution to ROC
Raise Your Share Capital Ceiling
What is authorised share capital?
Authorised share capital is the maximum value of shares your company may issue. Simply put, it is your ceiling. It sits in the capital clause of your Memorandum of Association. Paid-up capital, by contrast, is what you have actually issued. Therefore, you can never issue shares beyond your authorised share capital.
This is why the ceiling matters so much. First, it lets you bring in a new investor. Next, it supports a funding round or an ESOP pool. Above all, it keeps every fresh issue compliant under the Companies Act, 2013.
When should you increase your authorised share capital?
You raise the ceiling whenever a planned issue would cross it. In practice, this happens at a few clear moments.
- Before a fresh allotment. When a new issue would exceed your current authorised share capital.
- Before a funding round. This applies when an investor subscribes and the round crosses the ceiling.
- To create an ESOP pool. Here, you set aside shares for employees and need headroom.
- Before a bonus issue. This happens when capitalising reserves would breach the authorised limit.
Legal framework — Section 61 and your Articles
An increase in authorised share capital follows Section 61 of the Companies Act, 2013. Also, it is read with Sections 13 and 64. In short, four things must happen.
First, your Articles must allow it. Next, the members must pass the resolution. Then, you alter the capital clause of the MOA. Finally, you file Form SH-7 with the ROC. If the Articles do not permit it, you amend the AOA first and file MGT-14.
Documents required to increase authorised share capital
You need only a few papers to start. Also, our team checks each one before filing. As a result, objections stay rare. Here is the full list:
- Board resolution recommending the increase in authorised share capital
- Notice of the EGM with the explanatory statement
- Ordinary resolution, or special resolution, passed by the members
- Altered Memorandum of Association with the revised capital clause
- Altered Articles of Association, if the AOA needed a change
- Digital Signature Certificate (DSC) of an authorised director
How to increase authorised share capital — step by step
The process is simple with expert help. Moreover, Prospect Legal handles every step for you. Here is how it works:
Step 1 — Check the Articles and pass a board resolution
First, we confirm your Articles allow the increase. Then, the board recommends it and calls a general meeting.
Step 2 — Hold the EGM and pass the resolution
Next, the members approve the higher authorised share capital. Also, they alter the capital clause of the MOA.
Step 3 — File Form SH-7 with the ROC
Then, we file SH-7 within 30 days. Also, we pay the fee and stamp duty. If a special resolution was passed, we file MGT-14 too.
Step 4 — Receive the updated capital record
Finally, the ROC updates your authorised share capital. After that, you can allot new shares and file PAS-3.
SH-7 vs MGT-14 — which form do you file?
Founders often ask which form applies. In short, it depends on how you alter the capital clause. The table below makes it clear.
| Situation | Form SH-7 | Form MGT-14 |
|---|---|---|
| Ordinary resolution alters the capital clause (typical private company) | Required in 30 days | Not required |
| Special resolution required by the Articles | Required in 30 days | Required in 30 days |
| Articles amended first to allow the increase | Required after the AOA change | Required for the AOA special resolution |
ROC fees and stamp duty to increase authorised share capital
Two costs apply to the increase. First, the ROC filing fee is slab-based on the amount added. Next, state stamp duty applies on the increased capital. Both change by amount and by state. Therefore, we quote the exact figure upfront.
Here is a simple worked example. Suppose a company raises its authorised share capital from ₹1,00,000 to ₹10,00,000.
The ROC fee then applies to the ₹9,00,000 increase. Stamp duty applies at your state’s rate on the new capital. In the end, you get one clear, all-inclusive quote. Estimate — exact ROC fee and stamp duty vary by amount and state.
Timeline and penalty for late SH-7 filing (Section 64)
With papers ready, the filing takes only a few working days. However, SH-7 must reach the ROC within 30 days. Section 64 sets a penalty for late filing. Also, it applies to the company and every officer in default. Therefore, we track the deadline and file on time.
Why choose Prospect Legal to increase your authorised share capital?
Many firms just upload a form. Few, however, manage the whole process with real care. Here is what sets us apart:
- Correct route. Because we check your AOA first, you file exactly SH-7, or SH-7 with MGT-14.
- Exact costing. Also, we compute the ROC fee and state stamp duty before you commit.
- Same-day allotment. Next, we can run the increase and the fresh allotment together.
- Deadline safe. Moreover, we file SH-7 inside the 30-day window to avoid Section 64 penalties.
- Real support. Above all, you can reach a human on call or WhatsApp anytime.
Increase in authorised share capital — what’s included
| Service | What we do | Benefit to you |
|---|---|---|
| AOA Check | Confirm the Articles permit the increase | File the correct forms |
| Resolutions | Draft board and shareholder resolutions | Valid, compliant approvals |
| MOA Alteration | Revise the capital clause | A clean, updated MOA |
| SH-7 Filing | File Form SH-7 with the ROC | Higher capital on record |
| MGT-14 (if needed) | File the special resolution | Full AOA compliance |
| Post-Increase Support | Guide allotment and PAS-3 | Issue new shares smoothly |
Related corporate compliance services
Share-capital work often needs more than one step. Therefore, explore these related services next:
Frequently asked questions about increasing authorised share capital
What is the difference between authorised share capital and paid-up capital?
Authorised share capital is the maximum capital your company can issue. Also, it is stated in your Memorandum of Association. Paid-up capital, however, is the part actually issued to shareholders. Therefore, you must raise the authorised share capital before any larger allotment.
How do I increase the authorised share capital of a private limited company?
First, the board passes a resolution. Next, the members approve it in a general meeting. Then, you alter the capital clause of the MOA. Finally, you file Form SH-7 with the ROC within 30 days. We handle every step for you.
Which form is filed to increase authorised share capital — SH-7 or MGT-14?
Form SH-7 is always required to notify the ROC. Form MGT-14, however, is filed only for a special resolution. Most private companies use an ordinary resolution. Therefore, they file only SH-7.
What documents are required to increase authorised share capital?
You need the altered MOA with the new capital clause. Also, you need the notice, minutes, and resolutions. In addition, a director must sign with a valid DSC. We check every document before filing.
Costs, timeline and penalties
What is the time limit to file Form SH-7?
Form SH-7 must reach the ROC within 30 days. Also, the clock starts from the date of the resolution. Late filing brings extra fees and penalties. Therefore, we always file well inside the window.
What are the ROC fees and stamp duty to increase authorised share capital?
The ROC fee is slab-based on the amount of the increase. Stamp duty, meanwhile, is charged by your state. Both change with the figures and the state. So, we calculate the exact cost upfront.
Do I need to amend the Articles of Association to increase authorised capital?
Your Articles must allow the increase. If they do not, you first amend the AOA by special resolution. Then, you file MGT-14 and proceed with SH-7. We check your AOA at the very start.
What is the penalty for not filing SH-7 on time?
Section 64 sets a penalty for late filing. Also, it applies to the company and every officer in default. Timely filing avoids this fully. Therefore, we track the 30-day deadline for you.
Other common questions
Can I increase authorised capital and allot shares on the same day?
Yes, you can. First, we complete the increase and file SH-7. Next, we allot the new shares and file PAS-3. In fact, we often run both together for urgent funding rounds.
Does increasing authorised share capital affect my tax or net worth?
No, it only raises the ceiling for issuing shares. By itself, it does not change your net worth. Also, it creates no tax liability on its own. It simply lets you issue more shares later.
Is board approval alone enough to increase authorised capital?
No, board approval is only the first step. The members must also approve the increase in a general meeting. Only then can you alter the capital clause. After that, you file Form SH-7.
How long does it take to increase authorised share capital?
With papers ready, the resolutions and SH-7 filing take only a few working days. However, ROC processing can add a little time. We confirm a clear timeline upfront. Then, we keep you updated.
Need to increase your authorised share capital? Start today.
Do not let your capital ceiling hold up a funding round. Instead, let our experts pass the resolutions and file Form SH-7. As a result, your authorised share capital is raised cleanly and on time.
Increase in Authorised Share Capital in Bhopal and across Madhya Pradesh
Prospect Legal is a Bhopal-based corporate law firm handling increase in Authorised Share Capital for companies and LLPs across Madhya Pradesh. Whether your registered office is in Bhopal, Indore, Jabalpur, Gwalior, Ujjain or Sagar, our team manages the entire process end to end — documentation, the required filings and government submissions, and follow-up — so you stay compliant without travelling.
Businesses across MP choose us for fixed, transparent fees and a senior advisor who is actually reachable. Call 7000-12-7225 for a free consultation on increase in Authorised Share Capital anywhere in Madhya Pradesh.
