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Increase Authorised Share Capital Online

Increasing authorised share capital lets a company issue more shares than its memorandum now permits. Under section 61(1)(a) of the Companies Act, 2013 the company alters its capital clause in general meeting, if its Articles allow it, and files notice in Form SH-7 within 30 days of the alteration.

What the increase involves and the law behind it

A limited company with share capital may, if its Articles authorise it, alter its memorandum in general meeting to increase its authorised share capital (section 61(1)(a) of the Companies Act, 2013). Authorised capital is the maximum share capital the memorandum allows the company to issue.

When you need to increase authorised capital

Fresh issue or rights issue: Issuing shares above the current authorised capital.

  • Fresh issue or rights issue
  • Bonus shares, ESOPs and conversion of loans
  • Mergers
  • Not needed: issue within existing capital
  • Not this service
  • Authorised is not paid-up

Government fees and stamp duty

The SH-7 fee depends on the size of the increase; the MGT-14 fee depends on nominal capital.

  • Form SH-7: The difference between the fee on the new capital and the fee on the old capital (Fees Rules)
  • Form SH-7 filed late: Additional fee under the Fees Rules
  • Form MGT-14, only if a special resolution is passed: ₹200 to ₹600
  • Stamp duty on the increased capital: Depends on the state
  • StampMitra professional fee: From ₹2,999 + GST

Documents you need

The applicant is always a company, so there are no separate lists for proprietors, partnerships or trusts.

  • Board resolution approving the increase and calling the meeting
  • Notice of the general meeting with the explanatory statement
  • Certified copy of the general meeting resolution
  • Altered Memorandum of Association (capital clause)
  • Digital Signature Certificate of a director or authorised signatory

How the increase works

Time limits

The Registrar does not commit to a fixed processing time, so we do not quote one.

  • Notice of the general meeting: At least 21 clear days; shorter only with consent
  • Form SH-7: Within 30 days of the alteration
  • Form MGT-14, where a special resolution is passed: Within 30 days of passing the resolution

Work out your filing dates

Enter the day the capital clause was altered in general meeting.

What a late filing costs

Many websites quote a penalty of ₹1,000 a day up to ₹25 lakh for a late SH-7. Section 64(2) does not say that.

  • Form SH-7: Additional fee under the Fees Rules, and a penalty under section 64(2) on the company and every officer in default, for each day
  • Form MGT-14, where required: Additional fee of 2 to 12 times the normal fee, depending on the delay, and the section 117(2) penalty

Defects to avoid

Each point follows from a condition in the Act or the rules.

  • The Articles do not authorise an increase and were not altered first.
  • The altered memorandum with the new capital clause is not attached to Form SH-7.
  • The fee or the stamp duty is worked out wrongly for the new capital.
  • The notice to members is shorter than 21 clear days without valid consent.
  • Form SH-7 is filed after 30 days.

What StampMitra does for you

Draft the resolution and capital clause: We prepare the resolution, the meeting notice and the altered capital clause of the memorandum.

  • Draft the resolution and capital clause
  • Prepare and file Form SH-7
  • Filing acknowledgment and updated copy
  • Check the Articles first

How it works

  1. Check the Articles Confirm they authorise an increase; alter them first if not.
  2. Board meeting and notice Approve the increase and call a general meeting on 21 clear days' notice.
  3. General meeting Members approve the increase and the altered capital clause.
  4. File Form SH-7 File within 30 days of the alteration with the altered memorandum.
  5. File MGT-14 if needed Only if a special resolution was passed.

Frequently asked questions

What is the deadline to file the increase?

Form SH-7 has to be filed within 30 days of the alteration (section 64(1)).

Which form is used?

Form SH-7, with the altered memorandum attached. It was substituted on 21 January 2023.

Is Form MGT-14 compulsory?

Only if a special resolution is passed (section 117(3)(a)), for example to alter the Articles so that they authorise the increase.

What if the Articles do not allow an increase?

Alter the Articles first by special resolution under section 14 and file MGT-14, then increase the capital.

Which resolution approves the increase?

The increase is approved in general meeting under section 61, if the Articles authorise it. Whether the Articles ask for more than a simple majority depends on their wording, so we read them first.

Is stamp duty payable on the increase?

Stamp duty on increased capital depends on the state. We confirm the amount before filing.

What is the penalty for a late SH-7?

Section 64(2) imposes a penalty for each day of default on the company and on every officer in default, up to a maximum, and an additional fee applies under the Fees Rules. The widely repeated figure of ₹1,000 a day up to ₹25 lakh is not what the section provides.

What is the difference between authorised and paid-up capital?

Authorised capital is the ceiling set by the memorandum. Paid-up capital is what shareholders have actually paid for the shares issued.

Do I file a separate Memorandum amendment?

No. The capital clause is altered as part of this process, and the altered memorandum is attached to Form SH-7.

Does this service also reduce capital?

No. Reducing capital is a different procedure under section 66.