Increasing Authorized Share Capital
Legally expand your company’s capital base (Authorized and Paid-up) to unlock growth opportunities, attract investors, and ensure ROC compliance via **Form SH-7**.
Lawizer handles the Special Resolution, MOA amendment, stamp duty calculation, and timely filing of Form SH-7.
The Importance of Capital Expansion
Increasing your company's Authorized Capital is a crucial step for growth. It increases the ceiling for equity issuance, allowing the company to raise further capital and bring in new shareholders without amending the MOA repeatedly. The process requires a **Special Resolution** and filing **Form SH-7** within the statutory deadline.
Key Benefits of Increasing Capital
Enables scaling, business expansion, and new ventures
Creates opportunities for raising funds from new investors
Boosts transparency and trust among stakeholders
Ensures legal compliance and protects against penalties
Pre-Requisites for Capital Increase
The process varies slightly depending on whether you are increasing Authorized or Paid-up Capital:
1️⃣ For Increase in Authorized Capital (MOA Amendment):
- Form INC-20A for Commencement of Business should have been filed
- Details of the required Increase in Authorized Capital
- DIN of minimum 1 Director should be in 'APPROVED' Status
- One Valid Digital Signature (DSC) of an existing Director
- MOA (Memorandum of Association) must contain the necessary capital clause
2️⃣ For Increase in Paid up Capital (Share Allotment):
- Bank Statement showing deposit of Paid up Capital amount
- Share certificates of the Company (for updating)
- DIN of minimum 1 Director should be in 'APPROVED' Status
- One Valid Digital Signature (DSC) of an existing Director
Lawizer Deliverables
Filed e-forms with MCA (Form SH-7)
MCA payment challan for filing fees and stamp duty
Drafted Shareholders' Special Resolution (EGM)
Updated MOA and AOA copy
Guidance on printing new Share Certificates
Frequently Asked Questions
There is no maximum limit for the Authorized Share Capital of a Private or Public Limited Company under the Companies Act, 2013.
The **Authorized Capital** is the maximum limit up to which a Company can issue shares. The **Paid Up Capital** is the actual part of the Authorized Capital for which Shareholders have made the investment into the Company.
MOA (Memorandum of Association), AOA (Articles of Association), documents for Board Meeting, and documents for Extra Ordinary General Meeting (EGM) of the Shareholders. Lawizer assists in preparing and filing these.
Form **SH-7** is the primary form filed with the ROC to register the increase in Authorized Share Capital.
The time limit is **30 days** from passing of the Special Resolution in the Extra Ordinary General Meeting (EGM) for the increase in Authorized Share Capital.
Yes, Stamp duty is legally payable on the Increase of Authorized Capital. The amount depends on the size of the increase and the State in which the company is incorporated.
Yes, Share certificates need to be updated and issued to reflect the changes in the capital structure. We can guide and assist you in the proper issuance of the new Share Certificates.