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Company Authorized Capital Increase

Step-by-step support for authorized capital increase with accurate documentation and MCA compliance.
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Simple, Transparent Pricing for your Company Compliance.

Basic

Hassle-free Authorised & Paid-Up Capital Increase to fuel growth and elevate your company’s financial strength.
₹6,500/-
₹5,000/-
+ GST
&  ₹/- Govt Fee
Proceed To Pay
Expert Legal Compliance
Requirement & compliance check
Documentation guidance
Review of current capital structure
Drafting of Board & shareholder resolutions
Preparation of revised capital clauses
Filing of capital increase applications
Updating records with ROC
Email & WhatsApp updates

Who Needs Authorised And Paid Up Capital Increase

Companies Planning to Issue New Shares
Required before issuing shares to promoters, investors, or employees.
Companies Raising Additional Funds
Needed for expansion, new projects, or meeting financial requirements.
Companies Bringing In New Investors
Essential for private placement, rights issue, or preferential allotment.
Companies Issuing Bonus Shares
Mandatory when the existing authorized capital is insufficient for a bonus issue.

Authorised And Paid Up Capital Increase

MEANING OF AUTHORIZED SHARE CAPITAL:

Authorized Share Capital, also known as Nominal Capital, refers to the maximum amount of share capital that a company is permitted to issue to its shareholders as per its Memorandum of Association (MOA).
It represents the upper limit within which a company can raise funds through the issue of shares.

If a company wishes to issue shares beyond the limit of its existing authorized capital, it must first increase its authorized share capital by following the procedure prescribed under the Companies Act, 2013 and the Companies (Share Capital and Debentures) Rules, 2014.

NEED FOR INCREASING AUTHORIZED OR PAID-UP SHARE CAPITAL

Companies usually opt to increase their share capital in the following cases:

  • To raise additional funds for expansion or new projects.
  • To issue shares to new investors or promoters.
  • To meet eligibility criteria for government tenders, loans, or contracts.
  • To regularize existing share allotments that exceed the current authorized limit.

MEANING OF PAID-UP SHARE CAPITAL

Paid-Up Share Capital refers to the portion of the authorized share capital that has actually been issued to shareholders and for which payment has been received.
It represents the actual amount invested by the shareholders into the company.

In simple terms:

  • Authorized Capital = Maximum limit a company can issue shares up to.
  • Paid-Up Capital = Actual amount received from shareholders for shares issued.

A company may increase its paid-up capital by issuing new shares, rights issue, bonus issue, or private placement but only within the limit of its authorized capital.

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Documents Required for Authorised And Paid Up Capital Increase

Specific documentation must be filed within 30 days of shareholder approval to formally increase a company’s authorized share capital. For private companies, only e-form SH-7 is required; MGT-14 is not applicable.
Applicant Type
Documents Required
Altered Memorandum of Association (MOA)

Updated to reflect the revised Capital Clause.

Revised Articles of Association (AOA) (only if altered)

Needed when the AOA has been amended to permit the increase.

Ordinary Resolution Passed by Shareholders

Certified copy of the resolution approving the increase in authorized capital.

PROCEDURE FOR INCREASING AUTHORIZED SHARE CAPITAL

The following step-by-step process must be followed by a company to increase its authorized capital:

Step 1: Verify Articles of Association (AOA)

Check whether the AOA of the company permits an increase in authorized capital.
If not, the AOA must first be amended by passing a Special Resolution under Section 14 of the Act.

Step 2: Convene a Board Meeting

The Board of Directors should meet to:

  • Approve the proposal to increase authorized capital.
  • Fix the date, time, and venue of the Extraordinary General Meeting (EGM).
  • Approve the draft notice and explanatory statement under Section 102.

Step 3: Hold an Extraordinary General Meeting (EGM)

At the EGM, the members must pass an Ordinary Resolution approving the increase in authorized share capital and alteration of Clause V of the Memorandum of Association (Capital Clause).

Step 4: File Form SH-7 with ROC

After passing the resolution, the company must file Form SH-7 with the Registrar of Companies (ROC) within 30 days, along with the prescribed fee and attachments.

Step 5: ROC Approval

Once the Registrar verifies the documents, the authorized share capital stands increased, and the updated MOA is recorded.

 

Authorized capital is the maximum potential value of shares a company can issue, while paid-up capital is the actual value of shares that have been issued and paid for.

Reasons may include addressing financial needs, funding new initiatives, facilitating mergers, issuing additional shares, or meeting regulatory requirements.

Required documents typically include the amended MOA, resolution passed by shareholders, and filings such as Form MGT-14 and Form SH-7, along with other relevant company records.

The AoA must be amended to include provisions for altering authorized capital in accordance with the Companies Act, 2013.

Form MGT-14 is a filing required to register changes in the company’s capital structure with the Registrar of Companies (RoC), ensuring compliance with regulatory requirements.

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