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Need to Increase Your Company's Authorized Share Capital?
Get end-to-end SH-7 filing support including EGM documentation, stamp duty calculation, MoA amendment, and MCA portal filing. Expert CA/CS assistance from ₹4,999. File within 30 days to avoid ₹1,000/day penalty.
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Get professional assistance with the complete capital increase process from board resolution to RoC approval in 20 to 25 working days.
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Authorized Capital Increase Package 2026
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Complete within 7 days
7-day turnaround 100% guaranteed
Form SH-7 Filing with MCA
Board Resolution Drafting
EGM Notice Preparation (21-Day Notice)
EGM Minutes & Attendance Sheet
Ordinary/Special Resolution Drafting
Amended MoA Preparation
Stamp Duty Calculation (All States)
DSC Assistance for Director Signing
MCA V3 Portal Filing & Submission
Form MGT-14 Filing (If Applicable)
Updated Master Data Download
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*Government fees are additional and vary based on company structure
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Authorized share capital is the maximum amount of share capital a company can issue to shareholders, as defined under Section 2(8) of the Companies Act, 2013. It is specified in Clause V (Capital Clause) of the Memorandum of Association (MoA).
Governed by Section 61 of the Companies Act, 2013; requires EGM resolution and Form SH-7 filing within 30 days
Costs ₹4,999 onwards (professional fee) + government fees (₹5,000 to ₹2,06,000+) + state-specific stamp duty (0.10% to 0.15%)
Complete process takes 20 to 25 working days; the 21-day EGM notice period is the main timeline driver
Must be completed before any share allotment that would exceed the current authorized ceiling; issuing shares beyond authorized capital is void
Late filing penalty: ₹1,000 per day for the company (max ₹25 lakh) and per officer in default (max ₹5 lakh) under Section 64(2)
This page covers the complete process, costs, documents, timelines, and state-wise stamp duty for authorized capital increase under the Companies Act, 2013
Every company incorporated in India has an authorized share capital stated in its Memorandum of Association. This figure represents the upper ceiling of shares the company can issue. For most private limited companies, the default authorized capital at incorporation is ₹1 lakh, divided into 10,000 equity shares of ₹10 each. As the company grows, it may need to increase this ceiling to issue new shares to investors, create an ESOP pool, declare bonus shares, or convert debt into equity.
The process is governed by Section 61 (power to alter share capital), Section 64 (notice to RoC via Form SH-7), and Section 13 (MoA amendment) of the Companies Act, 2013. The Companies (Share Capital and Debentures) Rules, 2014 provide procedural specifics. Increasing authorized capital requires an EGM resolution, stamp duty payment, and MCA filing within 30 days. Government fees for SH-7 range from ₹2,000 (OPC/small companies) to ₹2,06,000+ based on the capital slab. If you are forming a new company, check our private limited company registration guide for default capital structure. For other event-based ROC filings, explore our full compliance services.
Parameter
Details
Governing Law
Companies Act, 2013 (Sections 61, 64, 13)
Regulator
Ministry of Corporate Affairs (MCA) / Registrar of Companies (RoC)
Applicable Rules
Companies (Share Capital and Debentures) Rules, 2014
Primary Form
SH-7 (Notice of alteration of share capital)
Additional Form
MGT-14 (Filing special resolutions)
Filing Deadline
30 days from EGM resolution date
Processing Time
20 to 25 working days (end-to-end)
Professional Fee
Starting ₹4,999 (IncorpX all-inclusive)
Authorized Capital vs Paid-up Capital: Key Differences
Understanding the four types of share capital is essential before increasing authorized capital. Authorized capital (Section 2(8)) is the maximum permissible ceiling. Issued capital (Section 2(50)) is the portion offered to investors. Subscribed capital (Section 2(86)) is the portion accepted by investors. Paid-up capital (Section 2(64)) is the amount actually received from shareholders. Each type is a subset of the previous one.
Worked Example: A company with ₹10 lakh authorized capital may issue ₹7 lakh (issued), of which investors accept ₹6 lakh (subscribed), and pay ₹5 lakh (paid-up). You only need to increase authorized capital when paid-up capital is approaching the authorized ceiling.
Parameter
Authorized Capital
Paid-up Capital
Definition
Maximum permissible share capital
Actual capital received from shareholders
Legal Reference
Section 2(8), Companies Act 2013
Section 2(64), Companies Act 2013
Stated In
Clause V of Memorandum of Association
Balance Sheet and MCA Master Data
Changed By
EGM Resolution + Form SH-7
Share Allotment + Form PAS-3
Stamp Duty
Yes (0.10% to 0.15% by state)
No separate stamp duty
MCA Filing Fee
₹5,000 to ₹2,06,000+ (SH-7 slab)
Per allotment filing fee (PAS-3)
Can Exceed Other?
Always greater than or equal to Paid-up
Can never exceed Authorized
Government Portal
MCA SH-7 filing on V3 portal
MCA PAS-3 filing on V3 portal
Tip: You only need to increase authorized capital when your company plans to issue new shares and the planned allotment would push paid-up capital beyond the authorized ceiling. If your paid-up capital is well below the authorized limit, no increase is required.
Why Increase Authorized Share Capital?
Companies increase authorized capital for 6 strategic reasons. Each scenario requires raising the MoA ceiling before any share allotment or transfer of shares that would exceed the current limit.
Equity Funding Rounds
A startup with ₹1 lakh authorized capital raising ₹50 lakh in Series A must first increase the ceiling. Investors require share allotment as proof of ownership.
ESOP Pool Creation
Employee Stock Option Plans typically reserve 10% to 15% of share capital. A ₹10 lakh authorized capital company issuing 15% ESOPs needs at least ₹1.5 lakh headroom.
Bonus Issue to Shareholders
Bonus shares under Section 63 are issued from reserves to existing shareholders. The total issued capital post-bonus must remain within authorized limits.
Debt-to-Equity Conversion
When lenders or debenture holders convert loans into equity, the company needs sufficient authorized capital to allot the conversion shares.
Regulatory Requirements
Certain licences mandate minimum capital. NBFCs require ₹2 crore net owned funds. Insurance companies need ₹100 crore. Authorized capital must cover these thresholds.
Strategic Investments and Mergers
During acquisitions or amalgamations, the acquiring company may need to issue shares to the target company's shareholders, requiring additional capital authorization.
Warning: Issuing shares beyond authorized capital is void under the Companies Act, 2013. The company and every officer in default face a penalty of ₹10,000 plus ₹1,000 per day of continuing default under Section 450. Always increase authorized capital before any share allotment.
Who Can Increase Authorized Capital?
Only companies with share capital registered under the Companies Act, 2013 can increase authorized capital. LLPs, partnership firms, and sole proprietorships do not have share capital and are not eligible.
Entity Type
Eligible?
Resolution Type
Special Notes
Private Limited Company
Yes
Ordinary or Special (per AoA)
Most common; default ₹1 lakh at incorporation
Public Limited Company
Yes
Ordinary or Special (per AoA)
Higher EGM quorum requirements (5/15 members)
One Person Company (OPC)
Yes
Written consent of sole member
Lower MCA fees starting at ₹2,000
Section 8 Company
Yes
Special Resolution required
May have restrictions per licence conditions
LLP
No
N/A
Uses contribution capital, not share capital
Partnership Firm
No
N/A
No share capital concept under Partnership Act
Sole Proprietorship
No
N/A
No share capital concept
Tip: LLPs have contribution capital, not share capital. For LLP capital changes, amend the LLP Agreement and file Form 3 with the RoC. The process and fees are different from share capital increase under the Companies Act.
Prerequisites Before Increasing Authorized Capital
Verify these 5 prerequisites before starting the capital increase process. Incomplete preparation causes filing delays and RoC rejections.
AoA Clause Verification
Check if your Articles of Association permit capital increase by ordinary resolution under Section 61. If a special resolution is needed, plan for 75% shareholder approval and MGT-14 filing.
No Pending Annual Filings
Confirm that Forms AOC-4 and MGT-7 for all prior financial years are filed with the RoC. Pending compliance defaults may trigger SH-7 rejection.
Director DSC Validity
Ensure the signing director's Digital Signature Certificate (DSC) is valid and registered on the MCA V3 portal. DSC renewal takes 1 to 2 working days.
Stamp Duty Calculation
Calculate stamp duty based on your registered office state. Rates range from 0.10% (Karnataka, UP) to 0.15% (Maharashtra, Delhi) of the increase amount, with state-specific caps.
MCA Fee Slab Determination
Identify the correct government fee for Form SH-7 based on your new nominal capital slab. Fees range from ₹5,000 (up to ₹1 lakh) to ₹2,06,000+ (above ₹1 crore).
Warning: If your company has pending annual filings (AOC-4 or MGT-7), clear them first. The RoC may reject Form SH-7 if the company's compliance status shows defaults. IncorpX can help clear pending filings before starting the capital increase.
Documents Required for Authorized Capital Increase
Prepare these documents before starting the process. All documents must be in PDF format for MCA V3 portal upload (maximum 10 MB per attachment).
Board-Level Documents
Board ResolutionProposing the authorized capital increase with exact old and new capital figures, signed by all attending directors
Board Meeting Notice7-day advance notice under Section 173, with agenda specifying the proposed increase
Shareholder-Level Documents
EGM Notice21 clear days notice to all shareholders under Section 101, with proposed resolution text and explanatory statement under Section 102
EGM MinutesDetailed minutes recording the resolution, chairperson's declaration, and attendance sheet signed by all present
Shareholder ResolutionCertified copy of the ordinary or special resolution passed at the EGM
Filing Documents
Current MoA and AoACertified copies of the existing Memorandum and Articles of Association
Amended MoAUpdated Memorandum reflecting the new authorized capital amount in Clause V
Stamp Duty ChallanProof of state-specific stamp duty payment via e-stamping portal
Form MGT-14Required only if a special resolution was passed (filed under Section 117)
Pro Tip: Keep digital copies of all documents ready before the board meeting. The MCA V3 portal accepts PDF uploads only. Scan all physical signatures at 200 DPI or higher. IncorpX prepares all documents during the 21-day EGM notice waiting period to save time.
Step-by-Step Process to Increase Authorized Capital
The authorized capital increase process has 7 steps, takes 20 to 25 working days, and costs ₹4,999 onwards (professional fees) plus government fees and stamp duty. The 21-day statutory EGM notice period under Section 101 is the primary timeline driver.
Step 1: Verify Articles of Association (AoA)
Review the AoA to confirm whether it authorizes capital increase by ordinary resolution under Section 61 of the Companies Act, 2013. If the AoA require a special resolution, plan for 75% shareholder approval and additional Form MGT-14 filing. Check if AoA specify any conditions or caps on alteration of share capital.
Time: 1 day
Step 2: Convene Board Meeting
Hold a board meeting with proper 7-day notice under Section 173 to propose the authorized capital increase. The board resolution must specify the exact increase amount (for example, ₹1 lakh to ₹10 lakh) and recommend calling an EGM. Record minutes and file with statutory registers.
Form: Board Resolution | Time: 1 to 2 days
Step 3: Issue EGM Notice to Shareholders
Send EGM notice to all shareholders with a minimum 21 clear days advance notice as required under Section 101 of the Companies Act, 2013. The notice must include the proposed resolution text, explanatory statement under Section 102, and the exact capital increase details. Electronic notice dispatch is permitted.
Form: EGM Notice | Time: 21 calendar days (statutory minimum)
Step 4: Hold EGM and Pass Resolution
Conduct the Extraordinary General Meeting with the required quorum: 2 members for private companies, 5 or 15 for public companies (depending on total membership). Pass the ordinary resolution (simple majority) or special resolution (75% majority) as applicable per your AoA. Video conferencing is permitted under Section 173. Record detailed minutes with attendance.
Time: 1 day
Step 5: Pay State-Specific Stamp Duty
Calculate and pay stamp duty on the increase amount based on your company's registered office state. Rates range from 0.10% to 0.15% with state-specific maximum caps (Maharashtra: 0.15%, cap ₹50 lakh; Karnataka: 0.10%, cap ₹30 lakh; Delhi: 0.15%, cap ₹25 lakh). Pay via e-stamping portal and retain the challan for MCA filing.
Portal: State e-stamping portal | Time: 1 to 2 days
File Form SH-7 (Notice of alteration of share capital) on the MCA V3 portal within 30 days of passing the EGM resolution, as required under Section 64. Attach the resolution, amended MoA, and stamp duty challan. Pay the government fee based on the nominal capital slab (₹5,000 to ₹2,06,000+). Sign digitally using the director's DSC. Read more about SH-7 and other event-based ROC forms on our blog.
Portal: mca.gov.in | Form: SH-7 | Time: 2 to 3 working days for RoC processing
Step 7: File Form MGT-14 (If Special Resolution)
If a special resolution was passed, file Form MGT-14 under Section 117 within 30 days to register the resolution with the RoC. This is filed in addition to SH-7. After RoC approval (2 to 3 working days), download the updated company Master Data from the MCA portal. Update all statutory registers. You can then proceed to issue new shares to investors under the increased capital ceiling.
Portal: mca.gov.in | Form: MGT-14 | Time: 2 to 3 working days
Common Mistake: Filing SH-7 after 30 days triggers ₹1,000/day penalty under Section 64(2). Calculate your filing deadline from the EGM resolution date, not the board meeting date. IncorpX tracks all deadlines and files within 5 working days of the EGM.
3,000+ capital filings completed. File within 30 days to avoid penalties.
Government Fees for SH-7 Filing (2026)
The MCA government fee for Form SH-7 depends on the company's nominal (authorized) share capital after the increase. OPC and small companies (paid-up capital up to ₹4 crore, turnover up to ₹40 crore under Section 2(85)) benefit from significantly reduced fees.
Nominal Share Capital (₹)
Regular Company Fee
Per ₹10,000 Above
OPC/Small Co. Fee
Up to 1,00,000
₹5,000
N/A
₹2,000
1,00,001 to 5,00,000
₹5,000+
₹400
₹2,000
5,00,001 to 10,00,000
₹21,000+
₹300
₹2,000
10,00,001 to 50,00,000
₹36,000+
₹300
₹2,000 + ₹200/₹10K
50,00,001 to 1,00,00,000
₹1,56,000+
₹100
₹2,000 + ₹100/₹10K
Above 1,00,00,000
₹2,06,000+
₹75
₹2,000 + ₹75/₹10K
Example: A regular company increasing authorized capital from ₹1 lakh to ₹10 lakh (new nominal: ₹10 lakh) pays ₹21,000 in government fees for SH-7. An OPC with the same increase pays only ₹2,000. If a special resolution was passed, Form MGT-14 attracts additional fees based on the same capital slab.
Tip: OPC and small companies benefit from significantly lower filing fees. Verify your "small company" status under Section 2(85) (paid-up capital up to ₹4 crore, turnover up to ₹40 crore) before filing. This can save ₹3,000 to ₹2,00,000+ in government fees alone.
State-wise Stamp Duty for Authorized Capital Increase
Stamp duty is charged on the increase amount only (new authorized capital minus old authorized capital), not on the total authorized capital. Rates and caps vary by state. Payment must be completed via e-stamping before filing Form SH-7. For a detailed guide, read our blog on MCA process and stamp duty for authorized capital increase.
State
Rate
Maximum Cap
Example (₹1 Cr Increase)
Maharashtra
0.15%
₹50,00,000
₹15,000
Delhi
0.15%
₹25,00,000
₹15,000
Karnataka
0.10%
₹30,00,000
₹10,000
Tamil Nadu
0.15%
₹25,00,000
₹15,000
Gujarat
0.15%
₹25,00,000
₹15,000
West Bengal
0.15%
₹25,00,000
₹15,000
Uttar Pradesh
0.10%
₹25,00,000
₹10,000
Rajasthan
0.10%
₹25,00,000
₹10,000
Madhya Pradesh
0.10%
₹25,00,000
₹10,000
Punjab
0.10%
₹25,00,000
₹10,000
Haryana
0.10%
₹25,00,000
₹10,000
Worked Examples:
₹1 lakh to ₹10 lakh in Maharashtra: Increase = ₹9 lakh. Stamp duty = 0.15% of ₹9,00,000 = ₹1,350
₹10 lakh to ₹1 crore in Karnataka: Increase = ₹90 lakh. Stamp duty = 0.10% of ₹90,00,000 = ₹9,000
₹1 crore to ₹10 crore in Delhi: Increase = ₹9 crore. Calculated duty = 0.15% of ₹9,00,00,000 = ₹13,50,000. Actual = ₹13,50,000 (within ₹25 lakh cap)
Warning: Non-payment of stamp duty attracts a penalty of up to 10 times the unpaid amount under the Indian Stamp Act, 1899. Stamp duty must be paid before filing Form SH-7 on the MCA portal. IncorpX calculates stamp duty for all 11+ states as part of the service package.
Free stamp duty calculation for your state. Expert CA/CS support from ₹4,999.
Timeline for Authorized Capital Increase
The complete process takes 20 to 25 working days end-to-end. The 21-day statutory EGM notice period under Section 101 is the main bottleneck. IncorpX prepares all documents (board resolution, EGM notice, resolution drafts, amended MoA) during the 21-day waiting period to save time.
Activity
Day Range
Statutory Basis
Board Meeting and Resolution
Day 1 to 2
Section 173 (7-day notice)
EGM Notice Dispatch
Day 2 to 3
Section 101 (21 clear days)
EGM Notice Waiting Period
Day 3 to 24
Statutory 21-day minimum
Hold EGM and Pass Resolution
Day 24 to 25
Section 61
Pay Stamp Duty
Day 25 to 26
Indian Stamp Act, 1899
File Form SH-7 on MCA
Day 26 to 27
Section 64 (within 30 days)
RoC Processing and Approval
Day 27 to 30
2 to 3 working days
Tip: IncorpX prepares all documents (board resolution, EGM notice, special resolution drafts, amended MoA, and stamp duty calculations) during the 21-day EGM notice waiting period. This parallel preparation ensures SH-7 is filed within 1 to 2 days of the EGM, well before the 30-day deadline.
Penalties for Late or Non-Filing of SH-7
The Companies Act, 2013 prescribes strict penalties for non-compliance with authorized capital alteration filing requirements. Both the company and individual officers face separate penalties.
Violation
Penalty (Company)
Penalty (Officer)
Legal Provision
Late SH-7 Filing
₹1,000/day (max ₹25 lakh)
₹1,000/day (max ₹5 lakh)
Section 64(2)
Non-payment of Stamp Duty
Up to 10x unpaid duty
Same
Indian Stamp Act, 1899
Shares Issued Beyond Authorized
₹10,000 + ₹1,000/day
Same
Section 450
Non-filing of MGT-14
₹1,000/day (max ₹25 lakh)
₹1,000/day (max ₹5 lakh)
Section 117
Warning: Both the company AND individual officers are penalized separately. Directors cannot claim ignorance as a defense. The 30-day deadline under Section 64 starts from the date the EGM resolution is passed. A 60-day delay costs the company ₹60,000 in penalties alone, plus ₹60,000 per officer in default.
File within 30 days. 3,000+ penalty-free filings completed by IncorpX.
Why Choose IncorpX for Authorized Capital Increase?
IncorpX has completed 3,000+ authorized capital increase filings with a 4.8/5 client rating. Our expert CA/CS team handles the end-to-end process, from board resolution drafting to RoC approval, starting at ₹4,999.
3,000+ Capital Filings
Proven track record across all company types and capital slabs, from ₹1 lakh to ₹100 crore increases.
Expert CA/CS Team
Qualified Chartered Accountants and Company Secretaries handle every filing. No outsourcing to juniors.
₹4,999 All-Inclusive
Transparent pricing with no hidden charges. Government fees and stamp duty payable at actuals.
100% Online Process
Board meetings and EGM via video conferencing. All forms filed digitally on MCA V3 portal. No office visits needed.
Stamp Duty for All States
Accurate stamp duty calculation for 11+ states. E-stamping portal payment assistance included.
Post-Filing Support
Updated MoA delivery, Master Data download, statutory register updates, and guidance on next steps like share allotment.
Refile Guarantee
If the RoC rejects your SH-7 filing due to any error on our part, we refile at zero additional professional fee. Government fees and stamp duty charged at actuals.
Frequently Asked Questions About Increasing Authorized Share Capital (2026)
Below are answers to common questions about authorized capital increase, Form SH-7 filing, stamp duty, government fees, and the EGM process. These answers are sourced from the Companies Act, 2013, MCA filing guidelines, and our experience completing 3,000+ capital increase filings.
Authorized share capital is defined under Section 2(8) of the Companies Act, 2013 as the maximum amount of share capital a company can issue to shareholders. It is stated in the Capital Clause (Clause V) of the Memorandum of Association. Private limited companies typically start with ₹1 lakh authorized capital at incorporation.
Form SH-7 is filed with the Registrar of Companies (RoC) under Section 64 of the Companies Act, 2013 to notify any alteration in share capital, including increase, consolidation, or subdivision. SH-7 must be filed within 30 days of passing the resolution at the EGM. Government fees range from ₹2,000 to ₹2,06,000+ based on the capital slab.
Form MGT-14 is filed under Section 117 of the Companies Act, 2013 to register special resolutions with the RoC. When a company passes a special resolution to increase authorized capital, MGT-14 must be filed within 30 days alongside Form SH-7. The filing fee depends on the company's authorized capital slab, and it requires the director's DSC for digital signing.
Nominal capital is another term for authorized share capital, representing the maximum share capital a company is authorized to issue as stated in the MoA. Under Section 2(8) of the Companies Act, 2013, it determines the MCA filing fee slab for Form SH-7 (₹5,000 to ₹2,06,000+) and the applicable state-specific stamp duty amount on any increase.
Shareholders approve the increase by passing a resolution at an Extraordinary General Meeting (EGM). Under Section 61 of the Companies Act, 2013, an ordinary resolution (simple majority) suffices if the Articles of Association permit it. If the AoA require a special resolution, 75% shareholder approval is needed. The board of directors initiates the proposal via a board resolution.
Yes, a company can increase authorized share capital without immediately issuing new shares. The increase raises the maximum permissible capital ceiling in the MoA only. The company may issue shares later when needed, such as before a funding round, ESOP allocation, or bonus issue. Section 61 of the Companies Act, 2013 governs this alteration.
Authorized capital increase is governed by Section 61 (power to alter share capital), Section 64 (notice to registrar via SH-7), and Section 13 (MoA amendment) of the Companies Act, 2013. The Companies (Share Capital and Debentures) Rules, 2014 and the Companies (Incorporation) Rules, 2014 provide the detailed procedural requirements for filing.
Yes, authorized capital can be reduced after an increase through a share capital reduction process under Section 66 of the Companies Act, 2013. This requires a special resolution, confirmation from the National Company Law Tribunal (NCLT), and creditor consent. The reduction process is significantly more complex, time-consuming, and expensive than an increase.
Yes, there is no statutory limit on how many times a company can increase its authorized capital under the Companies Act, 2013. Each increase requires a fresh EGM resolution, stamp duty payment on the new increase amount, and Form SH-7 filing with the RoC within 30 days. Government fees apply on the revised nominal capital each time.
The four types are: Authorized capital (maximum permissible, stated in MoA, Section 2(8)), Issued capital (portion offered to investors, Section 2(50)), Subscribed capital (portion actually taken by investors, Section 2(86)), and Paid-up capital (amount received from shareholders, Section 2(64)). Each subsequent type is a subset of the previous one.
Issuing shares beyond authorized capital is void under the Companies Act, 2013. The company and every officer in default face a penalty of ₹10,000 plus ₹1,000 per day of continuing default under Section 450. The company must first pass an EGM resolution and file Form SH-7 to increase the authorized capital ceiling before any share allotment.
Yes, the Memorandum of Association must be amended because authorized share capital is stated in the Capital Clause (Clause V) of the MoA. Under Section 13 of the Companies Act, 2013, any change to the MoA requires a shareholder resolution and filing with the RoC. Form SH-7 serves as the notification to the Registrar for this amendment.
The process has 7 steps: (1) verify AoA provisions, (2) hold a board meeting, (3) issue 21-day EGM notice, (4) pass ordinary or special resolution at EGM, (5) pay state-specific stamp duty, (6) file Form SH-7 on MCA portal within 30 days, and (7) file MGT-14 if a special resolution was passed. The entire process takes 20 to 25 working days.
Log in to the MCA V3 portal at mca.gov.in with your company's credentials. Select Filing Services, choose Form SH-7, enter the old and new authorized capital amounts, attach the EGM resolution and amended MoA, pay the applicable government fee (₹5,000 to ₹2,06,000+), and digitally sign using the director's DSC. Filing must be completed within 30 days.
Required documents include: board resolution, EGM notice (21 clear days), EGM minutes with attendance sheet, ordinary or special resolution copy, amended MoA, stamp duty payment challan, Form SH-7, Form MGT-14 (if special resolution), director's valid Digital Signature Certificate (DSC), and certified copies of the current MoA and AoA.
Verify 5 prerequisites before starting: (1) check if the AoA permits capital increase by ordinary resolution, (2) ensure no pending annual filings with the RoC, (3) confirm director DSCs are valid and active on MCA portal, (4) calculate state-specific stamp duty on the increase amount, and (5) determine the correct MCA fee slab for Form SH-7.
The complete process takes 20 to 25 working days: board meeting preparation (1 to 2 days), EGM notice period (21 clear days mandatory under Section 101), EGM and resolution (1 day), stamp duty payment (1 to 2 days), and MCA filing of Form SH-7 with RoC processing (2 to 3 working days). The 21-day EGM notice is the main timeline factor.
After RoC approves Form SH-7, complete these steps: (1) update the company's MoA with the new authorized capital figure, (2) update the Register of Members and other statutory registers, (3) file Form MGT-14 within 30 days if a special resolution was passed, (4) download the updated company Master Data from the MCA portal for records.
Yes, the Registrar of Companies (RoC) processes Form SH-7 filed under Section 64 of the Companies Act, 2013. After filing, the RoC verifies attached documents, confirms stamp duty payment, and approves the alteration. Processing typically takes 2 to 3 working days. If deficiencies are found, the RoC issues a resubmission notice with specific objections.
The MCA government fee for Form SH-7 depends on the nominal share capital slab: ₹5,000 for capital up to ₹1 lakh, increasing progressively to ₹2,06,000+ for capital above ₹1 crore. OPC and small companies pay a reduced fee starting at ₹2,000. Additional government fees apply for Form MGT-14 if a special resolution was filed.
Stamp duty is charged on the increase amount (new authorized capital minus old authorized capital). Rates vary by state: Maharashtra charges 0.15% (cap ₹50 lakh), Karnataka charges 0.10% (cap ₹30 lakh), and Delhi charges 0.15% (cap ₹25 lakh). Stamp duty must be paid via e-stamping before filing Form SH-7 on the MCA portal.
Under Section 64(2) of the Companies Act, 2013, late SH-7 filing attracts a penalty of ₹1,000 per day of delay for the company, capped at ₹25 lakh. Every officer in default also faces ₹1,000 per day, capped at ₹5 lakh. The 30-day filing deadline starts from the date the EGM resolution is passed.
Failing to file Form SH-7 within 30 days triggers penalties under Section 64(2): ₹1,000 per day for the company (maximum ₹25 lakh) and ₹1,000 per day per officer in default (maximum ₹5 lakh). The EGM resolution remains valid, but the RoC records are not updated until filing is completed with applicable additional fees and penalties.
Yes, if the funding amount pushes issued capital beyond the existing authorized capital ceiling. For example, a startup with ₹1 lakh authorized capital raising ₹50 lakh in equity must first increase authorized capital. File Form SH-7 and pay stamp duty before the share allotment. Angel tax exemptions under Section 56(2)(viib) may apply separately.
Yes, the entire process is completed online. Board resolutions and EGM can be conducted via video conferencing (permitted under Section 173 and the Companies (Meetings) Rules, 2014). Form SH-7 and MGT-14 are filed on the MCA V3 portal. Stamp duty is paid via e-stamping. IncorpX manages the full process starting from ₹4,999.
Companies increase authorized capital for 6 key reasons: raising equity funding from investors, issuing ESOP shares to employees, converting debt into equity, issuing bonus shares to existing shareholders, meeting regulatory requirements for specific licences (e.g., NBFC), and accommodating strategic investments or mergers. Section 61 of the Companies Act, 2013 governs the process.
Authorized capital is the maximum share capital a company can issue, stated in the MoA under Section 2(8). Paid-up capital is the actual amount received from shareholders against issued shares, defined under Section 2(64). A company with ₹10 lakh authorized capital may have only ₹1 lakh paid-up capital. Paid-up can never exceed authorized.
Authorized capital (Section 2(8)) is the maximum share capital a company is permitted to issue per its MoA. Issued capital (Section 2(50)) is the portion of authorized capital actually offered to investors for subscription. A company with ₹10 lakh authorized capital may issue only ₹5 lakh worth of shares. Issued capital can never exceed authorized capital.
Capital increase raises the maximum authorized ceiling via Form SH-7 under Section 61, requiring stamp duty. A stock split divides existing shares into smaller denominations without changing total capital value. A bonus issue distributes free shares from reserves to existing shareholders under Section 63. Only an authorized capital increase requires MCA filing and stamp duty payment.
Both follow Section 61 of the Companies Act, 2013. Private companies need 2 shareholders minimum for EGM quorum. Public companies need 5 or 15 shareholders (depending on total membership) for quorum. Public companies face additional disclosure requirements and SEBI compliance if listed. Government fees for SH-7 and stamp duty rates are identical for both.
Under Section 61, an ordinary resolution (simple majority, above 50% votes) suffices if the Articles of Association authorize the capital increase. If the AoA require a higher threshold, a special resolution (75% majority) is needed. Check your AoA's clause on alteration of share capital. A special resolution also requires filing Form MGT-14 with the RoC.
Maharashtra charges 0.15% stamp duty on the authorized capital increase amount with a maximum cap of ₹50 lakh. For example, increasing authorized capital by ₹1 crore costs ₹15,000 in stamp duty. Mumbai and Pune companies pay the same Maharashtra rate. Stamp duty must be paid via e-stamping before filing Form SH-7 on the MCA portal.
Delhi charges 0.15% stamp duty on the authorized capital increase amount, capped at ₹25 lakh maximum. For example, a ₹50 lakh capital increase attracts ₹7,500 in stamp duty. Companies in Delhi-NCR should note that Noida (UP, 0.10%) and Gurugram (Haryana, 0.10%) have different state rates. Verify your company's registered office state.
Karnataka charges 0.10% stamp duty on the increase amount with a cap of ₹30 lakh. A ₹1 crore authorized capital increase costs ₹10,000 in stamp duty. Bangalore-registered companies pay this rate. Karnataka's 0.10% rate is lower than Maharashtra (0.15%) and Delhi (0.15%), making it comparatively cost-effective for large capital increases.
Yes, foreign-owned companies (including wholly owned subsidiaries and joint ventures) can increase authorized capital under Section 61 of the Companies Act, 2013. The same EGM resolution, stamp duty, and Form SH-7 process applies. Additional compliance under FEMA regulations and RBI guidelines may apply for FDI-backed companies, including sectoral caps and pricing guidelines.
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