Increase Authorized Capital

Increase your company's authorized share capital via Form SH-7 — raise the ceiling to issue more shares. Board and member resolutions, MOA capital-clause update, stamp duty and ROC fee computation, and filing within 30 days handled end-to-end. Note: this raises your capital ceiling, not your paid-up capital.

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Increase Authorized Capital

Increasing your authorized share capital raises the maximum amount of share capital your company is permitted to issue. It is done by altering the capital clause of the Memorandum under Section 61(1)(a) and giving notice to the Registrar of Companies in Form SH-7 under Section 64(1), read with Rule 15 of the Companies (Share Capital and Debentures) Rules, 2014. It is a common step for a growing private limited company that wants headroom to bring in investors or issue more shares. Our CA-assisted service handles it end to end — resolutions, the SH-7 filing, the stamp-duty and ROC-fee computation, and the updated MOA.

Authorized vs Paid-Up: You're Raising the Ceiling, Not Money

This is the single most misunderstood point. Authorized capital is the maximum share capital your company may issue; paid-up capital is what shareholders have actually paid in. Increasing authorized capital:

  • Requires no funds — you are not bringing in money, only lifting the legal ceiling
  • Does not change your paid-up capital — that stays exactly as it was
  • Simply creates room to issue more shares in future

Actually issuing those shares and receiving money is a separate step — an allotment, reported to the ROC in Form PAS-3. Your paid-up capital can only ever rise up to the authorized ceiling, which is why the ceiling has to be raised first.

Ordinary or Special Resolution? It Depends on Your Articles

Which resolution you need turns on one question — does your Articles of Association (AOA) already permit an increase in capital?

  • If the AOA already permits it — an ordinary resolution (simple majority) of members is enough (Section 61(1)(a)).
  • If the AOA is silent or restricts it — you must first pass a special resolution to alter the Articles (Section 14), and only then increase the capital.

This distinction is what decides whether Form MGT-14 is needed — see below. We check your Articles up front so the right path is taken.

How It Works — Step by Step

1
Board Meeting
The Board meets (on at least 7 days' notice) to approve the proposed increase and to call an Extraordinary General Meeting (EGM).
2
Member Resolution at the EGM
Members pass the resolution — an ordinary resolution to increase the capital, or a special resolution first if the Articles must be altered to permit it.
3
File Form SH-7
Form SH-7, the notice of alteration of share capital, is filed with the ROC within 30 days of the resolution (Section 64(1), Rule 15).
4
File MGT-14 (only if a special resolution was passed)
If the Articles were altered by special resolution, Form MGT-14 is filed and its SRN is quoted in SH-7. A plain ordinary-resolution increase needs no MGT-14.
✓
Updated MOA & Records
The MOA capital clause (and the AOA, if altered) is updated to the new figure; the SRN and acknowledgement are shared for your records.

Do I Need to File MGT-14?

Usually, no. A straightforward increase passed by ordinary resolution needs only Form SH-7 — MGT-14 is not required. MGT-14 is triggered only when a special resolution alters the Articles; in that case it must be filed, and SH-7 cannot be filed without quoting the MGT-14 SRN. Assuming every capital change needs MGT-14 is a common and costly misconception — we file only what your situation actually requires.

What Does It Cost?

Our professional fee is a flat ₹2,499. Two government charges sit on top, and both scale with the amount of the increase — so there is no single fixed figure:

  • ROC filing fee — computed in slabs on the amount of increase (the fee on your new total capital less the fee already paid on the old), subject to an overall cap of ₹2.5 crore.
  • Stamp duty — state-specific, levied on the increase and paid electronically through the MCA portal at the time of filing. For Gujarat, it is subject to a maximum of ₹5 lakh.

Because both depend on your state and the exact figures, the MCA portal computes them at filing — we calculate the precise amounts for your specific increase before you pay, so there are no surprises.

Late Filing of SH-7 — Its Own Fee Regime

SH-7 has a distinct late-fee regime — it is not charged on the usual multiple-of-fee slab, and it is not a per-day amount. Delay in filing SH-7 attracts an additional fee of 2.5% per month (or part of a month) of the filing fee, for a delay of up to six months. Filing within the 30-day window avoids it entirely.

After the Increase: Issuing Shares

Raising the authorized capital only opens the door. To actually bring in money you allot shares to existing or new shareholders and file Form PAS-3 (return of allotment) with the ROC — a separate step. Your paid-up capital then rises, but always stays within the authorized ceiling you have just increased. Keeping these filings in order is part of your ongoing Company Annual Compliance.

Why File Your Capital Increase With Us

  • We read your Articles first — so you take the ordinary-resolution route where possible and avoid an unnecessary MGT-14
  • Accurate cost up front — we compute the scaling ROC fee and state stamp duty via the MCA portal before you commit
  • On-time SH-7 — filed within 30 days, with the 2.5%-per-month late fee computed accurately if the deadline has already passed
  • Complete paperwork — board and member resolutions, updated MOA (and AOA if altered), and your SRN records
  • Transparent pricing — flat ₹2,499 professional fee; ROC fee and stamp duty at actuals

Choose a Plan

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Complete Capital Increase
₹2,499
7 working days
AOA review — confirm whether your articles permit the increase (ordinary vs special resolution path)
Board meeting & EGM notice documentation
Member resolution drafting (ordinary, or special + AOA alteration if needed)
Form SH-7 preparation & filing within the 30-day deadline (s.64)
MGT-14 filing if AOA alteration requires it (special resolution cases)
Stamp duty & scaling ROC fee computation via the MCA portal
Updated MOA capital clause (and AOA if altered) + SRN records

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Frequently Asked Questions

Authorized capital is the maximum share capital your company is allowed to issue, as stated in the capital clause of its Memorandum. You increase it when you need headroom to issue more shares — for example, to bring in an investor or admit new shareholders — because you cannot issue shares beyond the authorized ceiling. The increase is filed with the ROC in Form SH-7 under Section 64.

No — this is the most common misconception. Increasing authorized capital only raises the ceiling; it requires no funds and does not change your paid-up capital. Actually bringing in money happens at a separate step — you allot shares and file Form PAS-3 (return of allotment). The ceiling has to be raised first so that the later allotment stays within it.

It depends on your Articles of Association. If the AOA already permits increasing capital, an ordinary resolution (simple majority) is enough under Section 61(1)(a). If the AOA is silent or restricts it, you must first pass a special resolution to alter the Articles (Section 14) and then increase the capital. We check your Articles before filing.

Only if a special resolution is involved. A plain capital increase by ordinary resolution needs only SH-7 — no MGT-14. MGT-14 is required only when a special resolution alters the Articles, and in that case SH-7 cannot be filed without quoting the MGT-14 SRN. Many people wrongly assume every capital change needs MGT-14.

The steps are: (1) a board meeting (at least 7 days' notice) to approve and call an EGM; (2) the member resolution at the EGM (ordinary, or special if the AOA is altered); (3) filing Form SH-7 with the ROC within 30 days of the resolution; (4) MGT-14 as well, only if a special resolution was passed; and (5) updating the MOA capital clause (and AOA if altered).

Our professional fee is a flat ₹2,499. On top sit two government charges that both scale with the amount of the increase, so there is no single fixed figure: the ROC filing fee (computed in slabs on the increase, capped overall at ₹2.5 crore) and stamp duty (state-specific — in Gujarat subject to a ₹5 lakh maximum). Both are computed by the MCA portal at filing, and we calculate the exact amounts for your increase before you pay.

Form SH-7 must be filed within 30 days of the resolution. SH-7 has its own late-fee regime — not the usual multiple-of-fee slab and not a daily charge: a delay attracts an additional fee of 2.5% per month (or part of a month) of the filing fee, for a delay of up to six months. Filing on time avoids it.

Authorized capital is the maximum your company may issue (the ceiling); paid-up capital is what shareholders have actually paid in. A company can have, say, ₹10 lakh authorized but only ₹1 lakh paid-up. Increasing authorized capital lifts the ceiling without touching paid-up; paid-up only rises when shares are actually allotted and money is received — and it can never exceed the authorized amount.

You make an allotment — the board allots shares to existing or new shareholders, they pay for them, and the company files Form PAS-3 (return of allotment) with the ROC. This is what increases your paid-up capital, and it must stay within the authorized ceiling you raised. The capital increase (SH-7) and the allotment (PAS-3) are two distinct filings.

Yes. Any company with share capital can increase its authorized capital as often as needed, provided the Articles permit it (or are altered to permit it). A private limited company follows the ordinary/special-resolution path above; a One Person Company does the same, with its single member passing the resolution. The SH-7 filing and 30-day deadline apply in each case.