Overview
The "Authorized Share Capital" is the maximum amount of capital a company is legally permitted to raise by issuing shares to shareholders, as mentioned in its Memorandum of Association (MoA). If a company wants to bring in a new investor, issue ESOPs, or allot bonus shares, and the required capital exceeds the current authorized limit, the company must first increase its Authorized Capital. This requires shareholder approval, alteration of the MoA, and payment of proportionate stamp duty to the government via Form SH-7.
What is Included in Our Package
Detailed compliance and filing scope managed by JRC corporate experts.
Documents Required to Start
Upload digital files during onboarding. No physical submissions needed.
Corporate Documents
- Current Memorandum of Association (MoA)
- Current Articles of Association (AoA)
- Digital Signature (DSC) of the Authorized Director
Internal Approvals (We draft these)
- Notice of EGM (Extraordinary General Meeting)
- Certified True Copy of the Ordinary/Special Resolution passed at the EGM
- Altered MoA highlighting the new capital clause
Step-by-Step Filing Timeline
Our step-by-step advisory workflow.
Step 1: Verify AoA Authorization
We review your Articles of Association to ensure it contains a clause permitting the increase in capital. (If not, the AoA must be amended first).
Step 2: Convene EGM
We draft the notices and hold the EGM where shareholders pass a resolution to increase the capital and alter the MoA.
Step 3: Stamp Duty Calculation & Filing
We calculate the ROC fee and stamp duty (which varies by state) based on the increased amount. We file Form SH-7 on the MCA portal.
Step 4: MCA Approval
The ROC reviews the form and payment. Upon approval, the MCA Master Data reflects the new Authorized Capital limit.
Key Advantages of Increasing Capital
Raising the capital limit allows the company to scale and dilute equity.
Enable Equity Fundraising
Venture Capitalists and Angel Investors require new shares to be allotted to them. Increasing the limit makes this allotment legally possible.
Improve Borrowing Capacity
Banks and financial institutions often link a company's borrowing limits to its paid-up/authorized capital base. A higher base improves creditworthiness.
Issue Bonus Shares
Allows a profitable company to capitalize its free reserves by issuing bonus shares to existing shareholders.
Frequently Asked Questions
Helpful answers to common regulatory inquiries.
What is the difference between Authorized and Paid-up Capital?▼
Authorized Capital is the maximum limit the company *can* issue. Paid-up Capital is the actual amount of shares already issued and paid for by shareholders. Paid-up capital can never exceed Authorized capital.
Do I have to pay ROC fees to increase it?▼
Yes. Increasing authorized capital attracts government fees and state-specific stamp duty, which is calculated as a percentage of the increased amount.
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