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Increase of Authorised Share Capital

Increase Authorised Capital in India
Make Room to Raise Funds, 100% Online

Need to issue more shares or bring in investors? Legal Terminus increases your company's authorised share capital under Section 61 of the Companies Act, 2013 — checking the Articles permit it, passing the resolution at an EGM, altering the MOA capital clause, and filing Form SH-7 with the ROC along with the stamp duty on the increase. This gives your company the headroom to allot fresh shares and raise capital. Our professional fee starts at ₹3,999 + GST. Government fees & stamp duty are billed separately at actuals.

Headroom to Issue More Shares
Ordinary Resolution & Form SH-7 Filing
MOA Capital Clause Altered
AOA Check & Allotment Guidance

3,000+

Updations filed

100% Online

End-to-end MCA filing

7+

Years of Compliance Expertise

CHOOSE YOUR PLAN

Increase your authorised capital at pocket-friendly prices

Increase Authorised Capital
₹7,999
₹3,999
+ Govt fee, stamp duty & GST extra
  • AOA check for capital-increase authority
  • Board resolution & EGM notice drafting
  • Ordinary resolution for the increase
  • Altered MOA capital clause
  • Form SH-7 preparation & ROC filing
  • Govt fee & stamp-duty coordination at actuals
  • Filing acknowledgement & status tracking
★ MOST POPULAR
Increase + AOA Amendment
₹13,999
₹7,499
+ Govt fee, stamp duty & GST extra
  • Everything in Increase Authorised Capital
  • AOA amendment where capital increase isn't permitted
  • Special resolution & MGT-14 filing for AOA change
  • Updated MOA & AOA on the MCA record
  • Statutory register & minutes updates
  • Capital-structure advisory before filing
  • Dedicated compliance manager + reminders
✦ FULL-SERVICE
Increase + Share Allotment
₹22,999
₹12,999
+ Govt fee, stamp duty & GST extra
  • Everything in Increase + AOA Amendment
  • Fresh share allotment (rights / preferential)
  • Board resolution & valuation guidance
  • Form PAS-3 (return of allotment) filing
  • Share certificate issuance & register updates
  • Cap-table update after the allotment
  • Priority support till the new shares are issued

Indicative Government & Out-of-Pocket CostsBilled at Actuals

The biggest cost in a capital increase is the MCA fee and state stamp duty calculated on the amount of the increase, not a flat fee. These are charged over and above our professional fee and confirmed at filing — billed at actuals per the MCA schedule and the applicable state stamp law.

Cost HeadTypical RangeNotes
MCA Fee on Increased Capital (SH-7)Slab-basedGovernment fee on the amount of increase, per the MCA capital fee schedule
Stamp Duty on Increased Capital0.15% – 0.25% (varies)State-specific stamp duty charged on the increase in authorised capital
Form MGT-14 (if AOA altered)₹300 – ₹600Required only where the AOA must be amended to permit the increase
Form PAS-3 (if shares allotted)₹300 – ₹600Return of allotment, filed when fresh shares are actually issued
DSC (if expired / not available)₹1,000 – ₹2,000Digital Signature Certificate of director required to sign the e-forms
Total Out-of-Pocket (typical)Depends on increase amountDriven mostly by the stamp duty & MCA fee on the increase — billed at actuals

TERMS & CONDITIONS

By subscribing to the above plans, you agree to abide by our following additional terms and conditions

  1. Professional Fee Only: All quoted prices cover professional services — AOA review, drafting of resolutions, the altered MOA capital clause, and filing of Form SH-7. They are exclusive of MCA government fees, stamp duty, and other out-of-pocket costs.
  2. Government Fees & Stamp Duty Payable Separately: The MCA fee and state stamp duty on the increased capital, and any MGT-14/PAS-3 fees, are calculated on the amount of the increase and reimbursed at actuals. These can be substantial for a large increase.
  3. GST on Our Fee: All quoted prices are exclusive of GST @ 18%, charged at checkout.
  4. Articles Must Permit the Increase: The company's Articles of Association must authorise an increase in authorised capital. If they do not, the AOA must first be amended by a special resolution (filed in Form MGT-14) — included only in the plan that specifies it and otherwise quoted separately.
  5. Resolution Requirement: Increasing authorised capital under Section 61 requires an ordinary resolution of the members at a general meeting (unless the Articles require a special resolution). The MOA capital clause is altered accordingly, and the change takes effect on filing with the ROC.
  6. 30-Day Filing Deadline: Form SH-7 must be filed with the ROC within 30 days of passing the resolution. Timely filing depends on the client providing signed resolutions and confirming the stamp-duty payment promptly. Late filing attracts additional MCA fees.
  7. Authorised vs Paid-Up Capital: Increasing authorised capital only raises the ceiling up to which shares can be issued — it does not by itself bring money into the company. Actual funds come only when shares are allotted (a separate step, included in the relevant plan).
  8. Share Allotment Scope: Issue of fresh shares (rights, preferential, or private placement) and filing of Form PAS-3 are included only in the plan that specifies them, and may involve valuation requirements assessed separately.
  9. Out-of-Scope Items: Reduction of capital, buy-back, share transfer, securities valuation reports, FEMA/RBI filings for foreign investment, and any tax advisory are not included and quoted separately.
Increase Authorised Capital by Legal Terminus

Legal Terminus Priority ⚖

Increasing authorised capital looks like one form — but an AOA that doesn't permit it blocks the whole filing, miscalculated stamp duty causes rejection, and confusing authorised with paid-up capital trips up first-time founders. Priority is what happens when a compliance expert checks the Articles, computes the duty correctly, and owns the filing end-to-end.

What you get

  • ⚡An upfront AOA check so we know whether a simple increase will do, or the Articles must be amended first — no surprises mid-filing.
  • ✅Correctly drafted board and members' resolutions, EGM notice, and the altered MOA capital clause.
  • ✅Accurate MCA fee and state stamp-duty computation on the increase, so Form SH-7 isn't bounced on a payment error.
  • 🔄Form SH-7 filed within the 30-day deadline and tracked to ROC approval, with the updated capital reflected on record.
  • 📑Allotment guidance — board resolution, PAS-3, and share certificates — so the new headroom is actually used to bring in funds.

Important Notes

  • Check the Articles first. A company can increase authorised capital only if its AOA permits it. If the Articles are silent or restrictive, they must be amended by special resolution before the increase — skipping this step leads to rejection.
  • Stamp duty is on the increase amount. The major cost is the MCA fee and state stamp duty calculated on the amount of the increase, not a flat fee. We compute it correctly up front so there are no shortfalls or surprises at filing.
  • Authorised is not paid-up. Increasing authorised capital only raises the maximum the company can issue. It does not bring in money — that happens only when shares are actually allotted, which is a separate, planned step.
  • File SH-7 within 30 days. Form SH-7 must be filed within 30 days of the resolution. Doing it promptly keeps the company compliant and ready to allot the new shares to investors without delay.
Consult a Compliance Expert
Increase Authorised Capital illustration

Why Increase Your Authorised Capital

Authorised capital is the maximum amount of share capital a company is allowed to issue to its shareholders, as stated in the capital clause of its Memorandum of Association. A company can issue (paid-up) shares only up to this ceiling. So when you want to bring in new investors, raise fresh funds, or convert loans into equity beyond your current limit, you must first increase the authorised capital under Section 61 of the Companies Act, 2013 — by passing a resolution and altering the MOA's capital clause.

The process is straightforward but precise: the Articles of Association must permit the increase (if not, they are amended first), the board approves and calls a general meeting, the members pass the resolution, and Form SH-7 is filed with the Registrar within 30 days along with the government fee and stamp duty calculated on the amount of the increase. Once registered, the company has the headroom to allot new shares. Getting it right is what lets you raise capital smoothly when an investment or expansion opportunity arrives — without scrambling at the last minute.

Increasing Capital vs Hitting the Ceiling: The Honest Comparison

What changes when you raise your authorised capital ahead of time versus being capped at the old limit:

ParameterCapital IncreasedStuck at Old Limit
Room to Issue SharesHeadroom availableCapped — cannot allot more
New InvestmentReady to onboard investorsDeal stalls until increase done
Loan-to-Equity ConversionPossibleBlocked beyond the ceiling
Fundraise TimingMove fast on opportunityWeeks of delay & risk
Investor ConfidenceCap table readyLast-minute compliance scramble
Company ContinuityCIN & history unchangedSame, but constrained
CostFee + stamp duty on increaseLost deal / opportunity cost

Common Reasons to Increase Authorised Capital

01

To Onboard New Investors

The most common reason — a company wants to issue fresh shares to angel investors, VCs, or new partners, but the new issue would take paid-up capital beyond the authorised limit. Increasing authorised capital creates the headroom needed to allot those shares and bring the investment in cleanly.

02

To Convert Loans / Infuse Promoter Funds

Promoters often fund their company through loans or director's advances. To convert those loans into equity, or to formally infuse more promoter capital as shares, the authorised capital must be high enough to accommodate the new shares. Raising it first makes the conversion or infusion possible.

03

For Expansion & Higher Net Worth

A larger authorised and paid-up capital strengthens the company's balance sheet and net worth, which helps in qualifying for bank loans, large tenders, and credit facilities. Companies planning expansion or seeking higher creditworthiness raise authorised capital to support fresh equity that funds the growth.

Benefits of Increasing Authorised Capital

Raising your authorised capital gives the company the legal headroom to issue more shares — unlocking fresh investment, a stronger balance sheet, and the flexibility to grow without compliance bottlenecks.

Room to Raise Fresh Capital

With a higher authorised limit, the company can issue new shares to investors or promoters whenever needed. You are no longer capped, so a funding round can close without waiting weeks to first expand the limit.

Investment-Ready Cap Table

Investors expect the company to be able to allot shares the moment terms are agreed. Having sufficient authorised capital signals readiness and avoids the last-minute scramble that can sour or delay a deal.

Stronger Balance Sheet & Net Worth

Issuing more equity off a higher authorised base boosts paid-up capital and net worth, improving the company's financial standing for banks, lenders, and large customers who assess capital adequacy.

Easier Loans & Tenders

Many banks and tendering authorities look at a company's capital base as a measure of scale and stability. A higher capital strengthens loan eligibility and helps qualify for higher-value tenders and credit limits.

Convert Loans into Equity

Promoter loans and director advances can be converted into shares only if there is room under the authorised limit. Increasing it enables clean loan-to-equity conversions that de-leverage the company and reward early backers.

Flexibility for Future Growth

Setting a comfortable authorised capital ahead of need means you can issue ESOPs, bring in partners, or fund expansion without repeating the process each time — saving repeated filings, fees, and lead time.

Authorised Capital Increase Process — Step by Step

Six steps from the AOA check to updated capital — and the headroom ready to issue new shares.

1

Check the Articles of AssociationStep 1

We first verify that the company's AOA authorises an increase in authorised capital. If the Articles are silent or restrictive, they are amended by a special resolution (filed in Form MGT-14) before the increase can proceed — so the path is clear from the start.

2

Board Meeting & EGM NoticeStep 2

A board meeting is held to approve the proposed increase and to call an Extraordinary General Meeting (EGM). We draft the board resolution and the EGM notice with the explanatory statement setting out the new authorised capital and the altered capital clause.

3

Resolution at the General MeetingStep 3

At the EGM, the members pass the resolution (ordinary, unless the Articles require special) to increase the authorised capital and alter the MOA's capital clause. We prepare the resolution and minutes and ensure the meeting is conducted correctly.

4

Compute Fee & Stamp DutyStep 4

We calculate the MCA government fee and the state stamp duty payable on the amount of the increase — the main out-of-pocket cost — so the exact figure is known and paid correctly, avoiding any shortfall that could cause rejection.

5

Filing Form SH-7Step 5

Form SH-7 — the notice of alteration of share capital — is filed with the ROC within 30 days of the resolution, signed with the director's DSC, attaching the altered MOA, the resolution, and the notice/explanatory statement.

6

Updated Capital & Share AllotmentStep 6

On registration, the increased authorised capital is reflected on the MCA record. The company can now allot fresh shares — and where included, we handle the allotment, Form PAS-3, share certificates, and the updated cap table.

Documents Required to Increase Authorised Capital

Get these ready and we'll take care of the rest

Company & Capital Documents

Records, capital & latest filings

Existing Company Records

Current constitution
  • Certificate of Incorporation & CIN
  • Existing MOA & AOA of the company
  • PAN of the company

Capital Details

Current & proposed structure
  • Current authorised & paid-up capital
  • Proposed new authorised capital
  • Face value & class of shares

Latest Filings

Compliance status
  • Latest filed financial statements (AOC-4)
  • Latest annual return (MGT-7)
  • Current shareholding pattern

Director & Approval Documents

KYC, resolutions & altered MOA

Director KYC & DSC

For filing the e-form
  • PAN & Aadhaar of directors
  • Active DIN & DSC of the signing director
  • Updated contact details of directors

Resolutions & Notices

Approving the increase
  • Board resolution approving the increase
  • EGM notice with explanatory statement
  • Ordinary (or special) resolution & EGM minutes

Altered MOA / AOA

Reflecting the new capital
  • Altered MOA capital clause (drafted by us)
  • Amended AOA (if increase wasn't permitted)
  • Stamp-duty payment proof on the increase

Increase Authorised Capital — FAQs

Got questions? We've got answers — straight, no-BS, legally accurate.

Authorised capital is the maximum amount of share capital a company is permitted to issue to its shareholders, as stated in the capital clause of its Memorandum of Association. A company can issue paid-up shares only up to this ceiling. To issue shares beyond it, the authorised capital must first be increased.
Authorised capital is the upper limit set in the MOA, while paid-up capital is the amount of shares actually issued to and paid for by shareholders. Paid-up capital can never exceed authorised capital. Increasing authorised capital raises the ceiling; it does not itself bring in money — that happens only when shares are allotted.
You need to increase it whenever you want to issue new shares that would take paid-up capital above the current authorised limit — for example, to onboard investors, infuse promoter funds, convert loans into equity, issue ESOPs, or strengthen the balance sheet for loans and tenders. If the new issue fits within the existing limit, no increase is needed.
Under Section 61 of the Companies Act, 2013, the Articles must permit the increase (if not, they are amended first), the board approves and calls a general meeting, the members pass a resolution to increase the capital and alter the MOA capital clause, and Form SH-7 is filed with the ROC within 30 days along with the fee and stamp duty on the increase.
Form SH-7 — the notice to the Registrar for alteration of share capital — is filed within 30 days of passing the resolution, with the altered MOA and the resolution attached. If the Articles had to be amended to permit the increase, Form MGT-14 is also filed for that special resolution.
The professional fee is separate from the government cost. The major government cost is the MCA fee plus state stamp duty calculated on the amount of the increase (not a flat fee), so a larger increase costs more. We compute the exact fee and stamp duty up front and bill them at actuals.
Increasing authorised capital under Section 61 generally requires an ordinary resolution of the members, unless the company's Articles specifically require a special resolution. However, if the Articles do not permit an increase at all, they must first be amended by a special resolution (filed via Form MGT-14) before the increase can be carried out.
No. Increasing authorised capital simply raises the ceiling up to which shares can be issued. You can allot the new shares whenever you are ready — when an investor comes in, a loan is converted, or funds are infused. The allotment is a separate step involving a board resolution, payment, and filing of Form PAS-3.
We check the AOA, draft the board and members' resolutions, EGM notice, and the altered MOA capital clause, compute the MCA fee and stamp duty on the increase, file Form SH-7 (and MGT-14 if the AOA needs amendment) within the deadline, and — where included — handle the subsequent share allotment and Form PAS-3. Book a free consultation to get started.

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