Increase Authorised Capital of a Company in India: SH-7 Filing Explained
Running out of headroom to issue new shares? Before you can allot a single additional share, your company's authorised capital - the ceiling fixed in the Memorandum of Association - must be raised. This guide covers exactly how to increase authorised share capital under the Companies Act, 2013, the resolutions and forms involved, and how KanoonPe files it end-to-end at a flat, all-inclusive price.
Quick summary
- What it is: Raising the maximum share capital a company is legally permitted to issue, by amending the capital clause of the MOA.
- Governed by: Section 61 & 64 of the Companies Act, 2013; filed via Form SH-7 (and MGT-14 for private companies increasing capital by ordinary resolution, where AOA requires).
- Best for: Companies raising a new funding round, issuing ESOPs, or bringing in new shareholders beyond current capital limits.
- KanoonPe price: Flat, all-inclusive quote on a free callback · Timeline: typically 5–8 working days.
Quick facts
| Detail | Information |
|---|---|
| Governing law | Companies Act, 2013 (Sections 13, 61, 64) |
| Filing forms | Form SH-7 (notice of alteration of capital); Form MGT-14 (for resolution filing, where applicable) |
| Approval needed | Board resolution + ordinary/special resolution of shareholders (per AOA) |
| Filing deadline | SH-7 within 30 days of passing the resolution |
| Authority | Registrar of Companies (ROC), MCA portal |
| KanoonPe price | Flat, all-inclusive quote - request a free callback |
| Timeline | 5–8 working days |
What does it mean to increase authorised capital?
Increasing authorised capital means raising the maximum amount of share capital a company is permitted to issue to shareholders, by altering the capital clause (Clause V) of its Memorandum of Association and filing Form SH-7 with the Registrar of Companies.
Authorised capital is different from paid-up capital - the amount shareholders have actually invested. A company cannot allot new shares, bring in a new investor, or issue ESOPs beyond its current authorised limit. If your paid-up capital is close to or at the authorised ceiling, this step must be completed first.
The process requires the company's Articles of Association (AOA) to permit an increase; if silent, the AOA itself may need amendment alongside the capital increase.
Who needs to increase authorised capital?
- Startups closing a new funding round that pushes paid-up capital past the current ceiling.
- Companies issuing ESOPs to employees that would exceed authorised limits.
- Businesses onboarding new shareholders or converting loans/debt to equity.
- Companies preparing for a rights issue or bonus issue of shares.
- Promoters increasing capital ahead of a private placement.
Benefits of increasing authorised capital in time
- Unlocks fundraising - No new shares can be allotted until authorised capital has room.
- Avoids allotment delays - Doing this proactively prevents a bottleneck mid-funding-round.
- Enables ESOP pools - Employee stock option issuance needs sufficient headroom.
- Clean compliance record - Filed on time, it avoids additional ROC fees and scrutiny.
- Signals growth readiness - A higher authorised capital base supports future capital raises without repeated amendments.
Documents required to increase authorised capital
Company documents
- Certificate of Incorporation and PAN
- Existing Memorandum of Association (MOA) and Articles of Association (AOA)
- List of directors and shareholders (DIN, PAN, address)
- Latest financial statements (for reference, not mandatory to file)
Resolutions
- Board resolution approving the proposal and convening a general meeting
- Ordinary/special resolution passed by shareholders (as per AOA requirement)
- Notice of general meeting with explanatory statement
Filing attachments
- Altered MOA (Clause V - capital clause) reflecting new authorised capital
- Digital Signature Certificate (DSC) of an authorised director/CS
Ready to get started? Talk to a verified expert → - get a transparent, all-inclusive quote to increase your authorised capital within one business hour.
Process to increase authorised capital (step by step)
- Check the AOA. Confirm the Articles permit an increase in authorised capital; if not, amend the AOA simultaneously.
- Convene a board meeting. Pass a board resolution approving the proposal and calling a general meeting (EGM or through AGM).
- Issue notice to members. Send the notice with an explanatory statement at least 21 clear days before the meeting (or shorter notice with consent).
- Pass the resolution. Shareholders approve the increase by ordinary resolution (or special resolution if the AOA also needs altering).
- File Form MGT-14. Required where a special resolution is passed, or per the company's AOA - filed within 30 days of the resolution.
- File Form SH-7. Notify the ROC of the alteration of share capital within 30 days of passing the resolution, along with the altered MOA and applicable government fee.
- ROC approval. Once processed, the revised authorised capital reflects on the MCA master data, enabling further share allotments.
Cost of increasing authorised capital in India
| Cost component | What drives it |
|---|---|
| Government/ROC fee for SH-7 | Slab-based on the incremental authorised capital added |
| Stamp duty | State-specific, calculated on the increase in capital |
| MGT-14 filing fee (if applicable) | Based on existing authorised capital slab |
| Professional fees | Drafting resolutions, notices, altered MOA, and filing |
KanoonPe offers a flat, all-inclusive quote - resolution drafting, notice preparation, altered MOA, and SH-7/MGT-14 filing bundled into one transparent number. Government fees and stamp duty, which vary by capital slab and state, are shown upfront before you commit.
Timeline to increase authorised capital
| Stage | Typical time |
|---|---|
| Board resolution & notice preparation | 1 day |
| Notice period to members (or shorter notice) | 1–7 days (as agreed) |
| General meeting & resolution | 1 day |
| MGT-14 filing (if applicable) | 1 day |
| SH-7 filing & ROC processing | 2–4 working days |
| Total | 5–8 working days |
Every KanoonPe order carries a written SLA - filed on time or you get a refund.
Penalties for delayed or non-compliant capital increase
- Late filing of SH-7 attracts additional government fees under the Companies (Registration Offices and Fees) Rules, ranging from 2x to 12x the normal fee depending on the delay.
- Allotting shares beyond authorised capital without filing SH-7 first is void and can invite penalties under Section 64 read with Section 450 of the Companies Act, 2013.
- Non-filing of MGT-14 where required attracts a penalty on the company and every officer in default.
Increase authorised capital vs share transfer - what's different
| Factor | Increase authorised capital | Share transfer |
|---|---|---|
| Purpose | Raises the ceiling for future share issuance | Moves existing shares between parties |
| Trigger | Funding round, ESOP pool, new allotment | Sale, gift, or exit of a shareholder |
| Form | SH-7 (+ MGT-14 if applicable) | SH-4 with stamp duty |
| Changes MOA? | Yes, capital clause | No |
Looking to transfer existing shares instead? See Share Transfer.
Why choose KanoonPe
- Transparent flat pricing - one all-inclusive number; ROC fees and stamp duty at actuals, shown upfront.
- Filed-on-time or refund - every order ships with a written SLA.
- One accountable case owner - a single named CS manages your filing end to end.
- Live status tracking - track SH-7/MGT-14 status on your dashboard in real time.
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