Increase Authorised Capital
You cannot issue shares beyond your authorised capital. When a funding round is closing, this is the two-week task nobody scheduled — so we do it before the term sheet is signed, not after.
Starts at ₹1,999 + MCA fees and stamp duty on the increase
What authorised capital is
Authorised capital is the ceiling on shares a company may issue, fixed by its memorandum of association. Paid-up capital is what has actually been issued and paid for. A company cannot allot shares that would take paid-up capital above the authorised ceiling.
Increasing it requires authority in the articles, an ordinary resolution of members, an alteration to the capital clause of the memorandum, and Form SH-7 filed within thirty days.
It is a routine procedure. It becomes urgent because it is invariably discovered at the point of allotment — when an investor has wired funds and the shares cannot lawfully be issued.
What it costs and covers
Investors expect allotment shortly after closing. Authorised capital has to be in place first.
The filing fee is calculated on the amount of the increase, on a slab basis, and is charged at actuals.
Stamp duty on the increase is a state levy and differs materially between states. We compute it before you file.
An ordinary resolution suffices, unlike most memorandum alterations. MGT-14 is generally not required for this alone.
Where the articles do not authorise an increase, they must be altered by special resolution first.
SH-7 must be filed within thirty days of the resolution, with the increase fee paid.
Documents required
Corporate
- Board resolution convening the general meeting
- Notice and explanatory statement to members
- Ordinary resolution approving the increase
- Altered memorandum showing the revised capital clause
- Articles of association, to confirm power to increase
Filing
- Form SH-7 with the revised capital structure
- Certified true copy of the resolution
- Digital signature of a director
Not sure which package fits?
A specialist will map your situation to the right plan in one call.
How it runs
- Check the articlesDay 1
We confirm the articles permit an increase. Where they do not, a special resolution altering them comes first.
- Compute the costDay 1
MCA fee on the increase plus state stamp duty, calculated before you decide how much headroom to take.
- General meetingDays 2–10
Notice issued and the ordinary resolution passed. Shorter notice is possible with member consent where timing is tight.
- SH-7 filedDays 10–14
Filed within thirty days with the altered memorandum and the fee on the increase.
- AllotmentAfter approval
Once approved, shares can be allotted and PAS-3 filed within thirty days of allotment.
Transparent pricing
Increase
₹1,999
articles already permit it
- Fee and stamp duty computation
- Resolutions drafted
- MoA altered
- SH-7 filed
- Articles alteration
- PAS-3 allotment
Increase + Allot
₹5,999
capital raised and shares issued
- Everything in Increase
- Articles alteration if needed
- PAS-3 return of allotment
- Share certificates issued
- Registers updated
- Valuation report
Funding Round
₹19,999
full round documentation
- Everything in Increase + Allot
- Registered valuer report
- Private placement documentation (PAS-4)
- MGT-14 where required
- FC-GPR for foreign investment
All prices are professional fees exclusive of GST at 18%. Government fees and stamp duty are charged at actuals and shown before you pay.
Practical points
Take more headroom than you need
The MCA fee is charged on the amount of the increase on a slab basis, so several small increases cost more in aggregate than one larger one, and each consumes two weeks. Companies expecting to raise again should take enough authorised capital to cover the next round as well.
Stamp duty is a state matter
Stamp duty on an increase in authorised capital is levied by the state of the registered office and varies substantially, with some states capping it and others not. This is frequently the larger component of the cost, and it should be computed before deciding the amount rather than discovered at filing.
Check the articles before the meeting
Section 61 permits an increase only if the articles authorise it. Many companies incorporated with standard articles do have the power, but not all. Where the power is missing, the articles must first be altered by special resolution — which needs MGT-14 and adds a week.
Authorised capital is not money
Increasing the ceiling does not bring any funds in and does not oblige you to issue anything. It is purely permission to issue. Companies sometimes resist increasing it out of a belief that it creates a liability; it does not.
Allotment is a separate exercise
Once the capital is authorised, issuing shares requires its own process — a private placement offer in Form PAS-4 where applicable, a valuation report, a board resolution, allotment, PAS-3 within thirty days and share certificates within two months. For foreign investment, FC-GPR must also be filed with the Reserve Bank.
The relevant provisions are sections 61 and 64 of the Companies Act, 2013, administered by the Ministry of Corporate Affairs.
After the increase
Update the memorandum in your records and make sure the version circulated to investors and lenders shows the revised capital clause. A stale memorandum in a data room raises questions that are tedious to answer.
When you allot, file PAS-3 within thirty days and issue share certificates within two months. Where the subscriber is a non-resident, FC-GPR must be filed with the Reserve Bank through your authorised dealer bank within thirty days of allotment.
Remember that authorised capital also affects the fee on many other MCA filings, which are computed on a slab keyed to it. Taking a very large increase to save future effort has a small ongoing cost worth being aware of.
Frequently asked questions
How long does it take to increase authorised capital?
Usually seven to fifteen days, covering the general meeting and the SH-7 filing. Where the articles must first be altered, add about a week.
What does it cost?
Our fee starts at ₹1,999. The MCA fee is calculated on the amount of the increase on a slab basis, and state stamp duty applies on top — often the larger element. We compute both before filing.
Do I need a special resolution?
An ordinary resolution is sufficient to increase authorised capital, provided the articles authorise it. If the articles do not, they must first be altered by special resolution.
Does increasing authorised capital mean I must issue shares?
No. It only raises the ceiling on what may be issued. No funds come in and no obligation is created until shares are actually allotted.
What is the difference between authorised and paid-up capital?
Authorised capital is the maximum the company may issue, set by the memorandum. Paid-up capital is what has actually been issued and paid for. Paid-up can never exceed authorised.
What comes after the increase?
Allotment — which requires its own board resolution, a valuation where applicable, PAS-3 within thirty days, share certificates within two months, and FC-GPR where the investor is non-resident.
Official references
The statutory sources behind this page. We keep our guidance aligned to them — verify anything time-sensitive directly.
- Ministry of Corporate AffairsCompanies Act filings, forms and fee schedules
- Income Tax DepartmentReturns, forms, rates and e-filing utilities
Content on this page is reviewed by a chartered accountant or advocate at LexVerge LLP. It is general guidance, not advice on your specific facts.