Authorised Capital Increase
Raise the ceiling on shares your company may issue, with the resolutions and capital clause amendment filed.
Authorised capital is the ceiling on shares a company may issue. Paid-up capital is what has actually been issued and paid for. When you need to issue shares beyond the existing ceiling — for a new investor, a bonus issue or a rights issue — the ceiling must be raised first.
It is a straightforward procedure, but it has to be done before the allotment, not after. An allotment beyond the authorised limit is void, and unwinding it is considerably harder than raising the ceiling in advance.
Choose a package
When you need to increase it
- Bringing in an investor whose subscription would exceed the current ceiling
- A bonus issue capitalising reserves
- A rights issue to existing shareholders
- Converting loans or convertible instruments into equity
- Meeting a minimum capital requirement imposed by a regulator or a tender
The procedure
The articles must permit an increase. Where they do not, they have to be altered first, which needs a special resolution — a step that is easy to miss and stalls the filing.
- Check the articles for a power to increase authorised capital
- Board meeting to approve and to call a general meeting
- General meeting, and an ordinary resolution increasing the capital
- Form SH-7 filed with the Registrar within thirty days
- Stamp duty paid on the increase, at the rate applicable in the state
- The memorandum updated to show the revised capital clause
The cost is mostly stamp duty
The government fee for the increase is charged on a slab linked to the amount, and stamp duty is payable on top at the rate fixed by the state where the registered office is situated.
Because both scale with the amount, it is usually more economical to raise the ceiling once with headroom for the next few years than to increase it repeatedly in small steps.
How we handle it
- 1 Checking the articles We confirm the articles permit an increase, and prepare the alteration where they do not.
- 2 Board approval The board meeting is convened, the increase approved and the general meeting called.
- 3 Shareholder approval The general meeting is held on proper notice and the resolution passed.
- 4 Computing duty The government fee and state stamp duty on the increase are calculated and confirmed to you.
- 5 Filing SH-7 The form is filed with the Registrar within thirty days with the resolution and altered memorandum.
- 6 Records updated The memorandum is updated and the revised capital reflected in the company records.
Frequently asked questions
What is the difference between authorised and paid-up capital?
Authorised capital is the maximum the company may issue. Paid-up capital is what has actually been issued and paid for. You can have a high ceiling and very little paid up.
Can I allot shares beyond the authorised capital?
No. An allotment exceeding the ceiling is void. The increase must be completed before the allotment is made.
Is a special resolution needed?
An ordinary resolution suffices for the increase itself. A special resolution is needed only if the articles have to be altered to permit it.
What does it cost?
A government fee on a slab linked to the amount, plus state stamp duty on the increase. Both scale with the amount, so raising it once with headroom is usually cheaper than repeated small increases.
Is there a maximum?
No statutory maximum. The company sets its own ceiling, subject to paying the fee and duty on the amount.
What is not included. Government fees, statutory charges, stamp duty, court and registry fees, digital signature costs and any third-party professional charges are separate and payable at actuals. GST applies on professional fees where indicated. Prices shown are indicative and may change without notice; we confirm the total in writing before any work begins — see our terms on pricing.
Talk to us about Authorised Capital Increase
Share your requirement and our team will confirm the documents needed, the exact charges and a realistic timeline — usually the same working day.
- Expert document checking before submission
- Regular status updates on WhatsApp
- Transparent professional charges
- Assistance in Marathi & English
Request This Service
More in Company (MCA / ROC) Compliance
Have a Legal or Documentation Need?
Talk to our experts today. Transparent pricing, fast processing and dedicated support.