Doc Summary
Overview
An Increase in Authorized Share Capital allows a Company to raise the maximum limit of its share capital as specified in its Memorandum of Association (MOA). This step is required before issuing new shares to existing or new shareholders for expansion, funding, or restructuring purposes.
The process is governed by Section 61 of the Companies Act, 2013 and requires approval from both the Company’s board and shareholders, followed by filing with the Registrar of Companies (ROC).
Eligibility / When It Applies
- Companies planning to issue new shares or raise additional funds
- Businesses undergoing equity infusion, investment, or restructuring
- Companies with exhausted authorized capital who need to increase their limit before allotment
Step-by-Step Process
- Review Articles of Association (AOA): Ensure that the AOA permits increase in share capital. If not, the AOA must be amended first.
- Board Meeting: Hold a board meeting to approve the proposal and fix the date for an Extraordinary General Meeting (EGM).
- Shareholder Approval: Pass a Special Resolution in the EGM to approve the increase.
- Amend MOA: Update the capital clause in the Memorandum of Association (Clause V) to reflect the new authorized capital.
- Filing with ROC: File Form SH-7 with the MCA within 30 days of passing the resolution.
- Acknowledgment: Once approved, the ROC updates the Company’s authorized capital in its records.
Documents Required
- Copy of board and shareholder resolutions
- Altered MOA and AOA (if applicable)
- Notice and minutes of EGM
- Certificate of Incorporation and CIN details
- Form SH-7 and government filing receipt
Timeline
The process usually takes 7–10 working days, depending on document readiness and approval from the ROC.
Post-Approval Requirements
- Update Company records, statutory registers, and accounting records
- Reflect the new capital in future ROC filings and financial statements
- Proceed with share allotment filings (if applicable) using Form PAS-3
- Inform investors, shareholders, and financial institutions of the change
Penalties for Non-Compliance
- Delay in filing Form SH-7 may attract a penalty of ₹1,000 per day
- Failure to pass proper resolutions may render the increase invalid
- Non-compliance can lead to rejection or legal action under the Companies Act
Kanoons Service
Kanoons Law & Tax Consultants Pvt. Ltd. provides complete assistance for increasing authorized share capital, ensuring compliance with all legal and procedural requirements.
Our services include:
- Review and amendment of the AOA (if required)
- Drafting board and shareholder resolutions
- Preparation and filing of Form SH-7 on the MCA portal
- Coordination with the Registrar of Companies for approval
- Guidance for subsequent share allotment and post-filing updates
Kanoons ensures your Company’s authorized capital increase is completed smoothly, accurately, and within statutory timelines.
Why Choose Kanoons
- End-to-end assistance from drafting to approval
- Fast and compliant filing through the MCA portal
- Transparent pricing and prompt status updates
- Expert handling of AOA and MOA amendments
- Trusted by growing businesses for compliance and expansion support
