A company’s authorized capital is the ceiling on the shares it can issue. To issue shares beyond that ceiling, the company must first raise its authorized capital, by a shareholder resolution and filing Form SH-7 within 30 days. Samkhya handles the entire authorized-capital increase for your company.
The authorized capital is the maximum share capital a company can issue, set out in clause V of its Memorandum. To go beyond it, the company increases the authorized capital under Section 61 of the Companies Act, 2013. The articles must permit the increase, if they do not, they are altered first, and the board then convenes a general meeting where the members pass an ordinary resolution. The company files Form SH-7 with the Registrar within 30 days of the resolution, with the altered Memorandum attached, paying stamp duty (commonly 0.15% of the increase, subject to a state cap) and the ROC fee. Increasing the authorized capital is the necessary first step whenever a company wants to issue shares beyond its current ceiling.
Raising the authorized capital brings benefits:
An authorized-capital increase requires:
The steps to increase the capital are:
An increase is needed:
Increasing the authorized capital starts with checking that the articles permit it; if not, the articles are altered first by special resolution. The board passes a resolution to increase the capital and to convene a general meeting, where the members approve the increase by an ordinary resolution and adopt the altered Memorandum. The company then files Form SH-7 with the Registrar within 30 days of the resolution, attaching the EGM resolution, the notice, and the altered Memorandum, and pays the ROC fee and the stamp duty on the increase through the MCA V3 portal. Once approved, the company’s authorized capital stands increased on the MCA records, and it can issue shares up to the new ceiling.
For the Increase:
Supporting:
Increasing the authorized capital follows a clear sequence:
Increasing your authorized capital with Samkhya Corporate Services is simple. Just follow these easy steps:
From there, our team handles the resolutions, altered MOA, and SH-7 filing.
Once the increase is approved:
An authorized-capital increase carries two main costs, both based on the amount of the increase: the ROC filing fee under the fee rules, and stamp duty, which is commonly 0.15% of the increase but varies by state and is often subject to a cap (for example, around Rs. 25 lakh in some states). Both are paid when Form SH-7 is filed. The discipline is the 30-day deadline from the resolution: filing SH-7 late attracts additional fees that rise with the delay (around 2.5% for a delay up to six months, and more beyond). Because both the fee and the stamp duty scale with the increase, companies often set a sensible new ceiling that leaves room for near-term issues without over-paying upfront.
| Feature | Detail |
| Governing Law | Section 61, Companies Act 2013. |
| Approval | Ordinary resolution of members. |
| Key Form | SH-7, within 30 days. |
| Document | Altered Memorandum (clause V). |
| Stamp Duty | Commonly 0.15% of increase, capped. |
| Portal | MCA V3. |
What is authorized capital?
Authorized capital is the maximum share capital a company can issue, set out in clause V of its Memorandum of Association.
How is authorized capital increased?
The members pass an ordinary resolution under Section 61, the Memorandum is altered, and the company files Form SH-7 within 30 days.
Why increase authorized capital?
Because a company can only issue shares up to its authorized ceiling, so the ceiling must be raised before issuing shares beyond it.
What is Form SH-7?
SH-7 is the form filed with the Registrar to notify an increase in authorized capital, with the altered Memorandum attached, within 30 days.
What does it cost?
The main costs are the ROC fee and stamp duty, both based on the amount of the increase, with stamp duty commonly around 0.15% subject to a state cap.
Do the articles need to allow it?
Yes. The articles must permit the increase; if they do not, they are altered first before the capital is increased.
