What Is Authorised Capital?
Authorised capital is the maximum share capital a company can issue, as stated in its Memorandum of Association. A company cannot issue shares beyond this limit.
Before bringing in new investors, issuing shares to founders or converting a loan into equity, the authorised capital often needs to be increased. This requires shareholder approval, an update to the MOA and filing Form SH-7 with the ROC, along with the applicable fees and stamp duty.
Increase your authorised capital before issuing shares
- Capital structure reviewed with you
- Resolutions and altered MOA prepared
- SH-7 filed with fees and stamp duty calculated
When Do You Need to Increase Authorised Capital?
- You are bringing in new investors or shareholders
- You plan to convert loans into equity
- You want to issue bonus or rights shares
- Your paid-up capital is close to the authorised limit
Benefits
Ready for investment
You can issue new shares as soon as investors are ready.
Stronger balance sheet
Higher capital can improve credibility with banks and partners.
Planned costs
We calculate government fees and stamp duty before filing.
Compliant allotment
The increase is completed before shares are allotted.
Documents Required
- Board resolution
- Ordinary resolution of shareholders (and AOA check)
- Altered Memorandum of Association (capital clause)
- Notice and minutes of the general meeting
- Digital signature of an authorised director
Process to Increase Authorised Capital
Check the Articles
We confirm the Articles allow an increase in capital.
Board meeting
The board approves the proposal and calls a general meeting.
Shareholder approval
Shareholders pass the resolution and approve the altered MOA.
SH-7 filing
Form SH-7 is filed within 30 days with the fees and stamp duty.
Allot shares
Once registered, new shares can be allotted and reported.
Common Mistakes to Avoid
Capital increases are simple but costly if handled wrongly.
- Allotting shares before the increase – Shares cannot be issued beyond the authorised capital.
- Articles that don’t permit it – Check that the Articles authorise an increase.
- Underestimating fees – MCA fees and stamp duty rise with the size of the increase.
- Late SH-7 – The form must be filed within 30 days of the resolution.
- Increasing more than needed – A larger increase costs more; plan for realistic needs.
After the Increase
Allot shares
Issue shares to investors or founders.
File PAS-3
Report the allotment to the ROC within the deadline.
FEMA reporting
File FC-GPR for foreign investors.
Update records
Register of members and share certificates updated.
Why Choose Vaidam Consultancy for Increase in Authorised Capital
Fees calculated upfront
MCA fees and stamp duty are estimated before you approve the increase.
Clear quote upfront
You receive our fee and the government charges before any work begins.
One point of contact
A single consultant prepares the resolutions, files the forms and follows up with the ROC.
Allotment support
We can also handle the share allotment and PAS-3 filing afterwards.
Frequently Asked Questions
Authorised capital is the maximum a company can issue; paid-up capital is the amount actually issued and paid for by shareholders.
SH-7 is the form used to notify the ROC of an alteration in share capital, such as an increase in authorised capital. It must be filed within 30 days of the resolution.
Yes. MCA filing fees and stamp duty are payable on the increase, and both depend on the amount of the increase and the state.
No. It only raises the upper limit. Shareholding changes only when new shares are actually allotted.
Authorised capital can be reduced by cancelling unissued shares, subject to the Articles and required filings.
No. A valuation is relevant when shares are actually issued, not for increasing the authorised limit.