Authorised Capital Increase
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Starting from₹4999
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exclusive of MCA Fees
Government fees and third-party charges apply where mentioned.
Every business may need additional funds as it grows. Short-term requirements can be met through loans and advances, while a Private Limited Company may address long-term funding needs by increasing its authorised capital.
Because changes to a company's capital structure are governed by the Companies Act, the prescribed rules and procedures must be followed.
LegallensIndia guides companies through each stage of increasing authorised capital.
Section 2(8) of the Companies Act, 2013 defines authorised capital as the capital authorised by a company's Memorandum to be the maximum amount of its share capital.
A company can issue share capital only up to this authorised limit. If it needs to issue shares beyond the existing ceiling to support expansion or raise more funds, it must first increase its authorised capital.
| Capital Type | Meaning |
|---|---|
| Authorised Share Capital | The maximum potential value of shares the company is permitted to issue |
| Paid-Up Capital | The actual value of shares issued, subscribed, and fully paid for by shareholders |
Paid-up capital cannot exceed authorised capital. When the paid-up amount reaches the authorised limit, a company can either increase authorised capital before issuing new shares or arrange a transfer of existing shares to new shareholders.
An authorised capital increase raises the maximum share capital that a company may legally issue. This generally requires an amendment to the Capital Clause of the Memorandum of Association.
Increasing the limit allows the company to issue additional shares to existing or new shareholders for expansion, new projects, or changing financial requirements.
The company's initial authorised and paid-up capital are established in its Memorandum of Association at incorporation. To issue shares beyond that authorised ceiling, the company must amend the MOA and raise the capital threshold before issuing the additional shares.
The required filing and supporting documents must be submitted within 30 days of shareholder approval.
The supplied content states that a private company files the resolution through Form SH-7 without Form MGT-14, while its later filing procedure also describes MGT-14 where applicable.
Check whether the AOA authorises a change in the company's authorised capital.
If the required provision is absent, amend the AOA under Section 14 of the Companies Act, 2013 before modifying the authorised capital.
Send every director a Board Meeting notice containing the agenda at least seven days in advance at their registered addresses.
At the meeting, pass a resolution to convene an Extraordinary General Meeting and approve issuing the notice under Section 101.
The proposed Ordinary Resolution seeks shareholder approval for the revised Capital Clause in the Memorandum of Association.
The EGM notice must state the agenda, date, time, venue, and voting method and be sent to directors, shareholders, and auditors.
Issue the notice at least 21 days before the EGM. A shorter notice is permitted with written or electronic consent from at least 95% of members entitled to vote.
Present the authorised-capital increase to the meeting and conduct voting in the manner described in the notice.
The Ordinary Resolution is passed after receiving the required shareholder approval. Prepare an explanatory statement describing the resolution and its implications and retain it with the official records.
Within 30 days of the resolution, submit the applicable forms, attachments, and fees to the Registrar of Companies.
The supplied procedure describes Form MGT-14 for registering the relevant resolution where applicable and Form SH-7 for reporting the authorised-capital increase.
Pay the required e-stamp duty on the increased authorised share capital through the Ministry of Corporate Affairs portal.
Where MGT-14 applies, it is filed with the Registrar within 30 days of adopting the relevant resolution.
Form SH-7 must be filed with the Registrar within 30 days of passing the resolution. It formally reports the increase in authorised share capital.
Update every copy of the Memorandum and Articles of Association so all company records consistently reflect the approved changes.
After raising the authorised limit, the company can increase paid-up capital by issuing new equity shares to existing or new shareholders and bringing additional funds into the business.
The team assists with revising the Memorandum so it accurately reflects the new capital structure.
LegallensIndia handles Form MGT-14 filing where it is applicable to the capital change.
The required Form SH-7 is prepared and submitted to record the authorised-capital increase officially.
Support covers the initial assessment, corporate approvals, document amendments, regulatory filings, and final submission.