How to Increase Authorised Share Capital of a Company

The authorised share capital is the maximum value of shares a company can issue, as stated in its MOA. When you want to bring in new investors, issue more shares to founders or convert loans into equity, you may first need to increase it.

Authorised vs paid-up capital

• Authorised capital – the upper limit of shares the company can issue.
• Paid-up capital – the value of shares actually issued and paid for.

Paid-up capital can never exceed authorised capital. If your planned share issue would cross the limit, the authorised capital must be increased first.

When is an increase needed?

• Raising funds from angel investors or venture capital
• Issuing a rights issue to existing shareholders
• Issuing ESOPs or bonus shares
• Converting loans into equity

Step-by-step process

1. Check the AOA – it must allow the company to increase its capital. If not, amend it first.
2. Board meeting – approve the proposal and call a general meeting.
3. General meeting – shareholders pass the required resolution to alter the capital clause of the MOA.
4. File SH-7 with the ROC within 30 days, with the altered MOA and the resolution.
5. Pay fees and stamp duty – ROC fees and stamp duty depend on the increase and the state.

Costs involved

ROC filing fees rise with the amount of increase, and stamp duty varies from state to state. It is sensible to increase capital to a level that covers your plans for the next few rounds, rather than making several small increases.

After the increase

Once SH-7 is approved, you can allot shares. Allotment requires its own approvals and a PAS-3 filing within the prescribed time. See our guide on rights issues.

We handle the full process through our increase in authorised capital service.

Why Choose Vaidam Consultancy?

Our team of chartered accountants, company secretaries and legal professionals handles the paperwork so you can focus on growing your business.

🌐 100% Online Process

Share documents from anywhere — no office visits needed.

📋 Deadline Tracking

We remind you before every due date, so you never pay avoidable late fees.

💬 Expert Guidance

Speak directly with a professional for advice that fits your situation.

🚀 Quick Turnaround

Clear timelines and regular status updates from start to finish.

Call or WhatsApp us at +91 78369 69141 or email vaidamconsultancyllp@gmail.com.

Frequently Asked Questions

Q1. Does increasing authorised capital mean investing more money?

No. It only raises the limit. Money comes in when shares are actually issued.

Q2. What is the time limit to file SH-7?

Within 30 days of the shareholders' resolution.

Q3. Is stamp duty payable on an increase?

Yes. Stamp duty on the increase is payable as per the applicable state rate.

Q4. Can authorised capital be reduced?

The unissued part can be cancelled, subject to the procedure in the Companies Act.