Increase Authorized Capital of your Company in

3 simple steps, you get

  • Documents Review
  • Review Articles of Association
  • Notice of Board Meeting
  • Notice of EGM
  • Minutes of EGM
  • Form SH-7 Filing
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Introduction

Authorised share capital is the maximum value of shares a company is legally permitted to issue, as specified in its articles of association. This limit can be increased through the approval of shareholders and regulatory authorities, providing the company with flexibility for potential future equity issuance.

Increasing authorised share capital is a strategic move that allows a company to adapt to changing financial needs, attract new investors, and plan for future expansion without immediately issuing new shares. The process involves obtaining shareholder approval and ensuring compliance with legal and regulatory requirements, contributing to the overall financial management and strategic planning of the company. It’s a financial management tool that aligns with a company’s long-term goals and adaptability in a dynamic business environment.

The entire process is managed by Experienced Chartered Accountants and Company Secretaries.

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Documents Checklist

We have compiled a list of documents required to Increase Authorized Share Capital of your company:

  • Formal notice to convene the EGM with details such as the agenda, date, time, and venue.
  • A copy of the ordinary resolution passed at the EGM approving the increase in authorized share capital, specifying the new limit.
  • Updated MOA reflecting the approved increase in authorized share capital, to be filed with regulatory authorities.Updated AOA ensures that there is a provision allowing for the increase of authorized share capital.
  • File Form SH7 with the Registrar of Companies, this form includes details of the increase in authorized share capital and is accompanied by relevant documents.
Increase Authorised Capital

process

Process of Increasing Capital

in 3 Simple Steps

At Bright Advis, we have simplified the entire  process of Increasing Authorized Capital into 3 simple steps. This makes your journey smooth, structured and easy.

  • Pre-application
  • We collect basic information
  • Gather required documents
  • Drafting & Application
  • Verification of Articles of Association (AOA)
  • Convening a Board Meeting
  • Notice of Extraordinary General Meeting (EGM)
  • Approval from Shareholders
  • Filing ROC Forms (Form SH7)
  • Approval
  • Allotment of Shares
  • Registrar Approval and MCA Portal Update

benefits

What's Good

about increasing Authorized Share Capital

Flexibility for Growth

One of the primary advantages is the flexibility it provides for future growth and expansion. With a higher authorized share capital, a company can issue additional shares as needed, making it easier to attract new investments and raise funds for strategic initiatives.

Shareholder Confidence

Shareholders may view an increase in authorized capital positively, as it demonstrates management's proactive approach to managing the company's financial structure. It can enhance confidence among existing shareholders regarding the company's ability to seize opportunities and navigate challenges.

Adaptability to Market Changes

Business environments are dynamic, and companies may need to respond to market changes quickly. Having an increased authorized capital allows a company to adapt to evolving financial needs without the necessity of going through the time-consuming process of amending its articles of association.

Strategic Planning

Increasing authorized capital is a strategic move that aligns with a company's long-term planning. It enables the management to have the financial flexibility to pursue strategic initiatives, such as mergers and acquisitions, capital expansions, or research and development projects.

Attracting Investors

A higher authorized capital can make a company more attractive to potential investors. It signals to the market that the company has the capacity to raise additional capital if necessary, which can be appealing to those considering investing in the business.

Enhanced Borrowing Capacity

A higher authorized capital can also positively influence a company's borrowing capacity. Lenders may view a company with a larger authorized capital as having a stronger financial position, potentially improving its ability to secure loans on favorable terms.

What do you get

when you register with our help

Have a query on Increasing Authorized Share Capital?

With the help of Bright Advis, you not only get the items mentioned on the side, you also get a friend who advices, guides and helps you grow into a great business. 

Discuss with an expert
  • Review of Documents
  • Review Articles of Association
  • Notice of Board Meeting
  • Notice of Extraordinary General Meeting(EGM)
  • Minutes of EGM & Form SH7 filing
  • Expert advice you can count on
  • Our Bright support throughout the process

The increase in authorised share capital is a crucial decision that allows a company to raise additional equity, attract investment, and expand operations. Every registered company in India is permitted to increase its authorised share capital as long as it follows the procedures laid out under the Companies Act, 2013. At Bright Advis, we provide complete assistance in filing, documentation, legal resolutions, and ROC compliance related to share capital increase.

Whether you’re planning to issue new shares or restructuring your finances, our experts ensure that the procedure for increase in authorised share capital is followed properly to keep your company legally compliant and investor-ready.

Introduction

The authorised share capital of a company is the maximum amount of capital that it is legally permitted to issue to shareholders. This limit is stated in the company’s Memorandum of Association (MOA). Any time a company plans to raise funds by issuing new shares, it must first ensure that it has sufficient authorised capital. If not, the company must apply for an increase in authorised share capital.

This process is governed by the Companies Act, 2013 and involves formal resolutions, filings with the Registrar of Companies (ROC), and updates to the company’s legal documents. Bright Advis takes care of the entire process so that business owners can focus on growth, not paperwork.

Understanding Authorised Share Capital

Before initiating a share capital increase, it’s important to understand a few terms:

  • Authorised Capital: The maximum capital a company can raise by issuing shares.
  • Issued Capital: The portion of authorised capital that is offered to investors.
  • Paid-up Capital: The amount that shareholders have paid against the issued shares.

Only if the company’s authorised capital allows can it issue additional shares. Hence, to raise more funds or induct new investors, increasing this ceiling becomes necessary.

Reasons to Increase Authorised Share Capital

  • Raising funds through equity issuance
  • Bringing new shareholders on board
  • Meeting investor expectations in funding rounds
  • Conversion of debt or preference shares into equity
  • Business expansion or diversification plans
  • Preparing for IPO or venture capital investment

Preliminary Checks Before Capital Increase

Before beginning the formal process, companies should ensure:

  • AOA Review: The Articles of Association should allow for capital increase. If not, AOA must be altered via a special resolution.
  • The MOA should clearly mention the existing capital structure.

Bright Advis reviews your company’s incorporation documents to confirm if an amendment is needed before starting the procedure.

Procedure for Increase in Authorised Share Capital

1. Convening a Board Meeting

  • Approve the intention to increase authorised capital
  • Decide on the amount of increase
  • Fix date, time, and venue for the Extraordinary General Meeting (EGM)
  • Authorise a director or secretary to send EGM notices

2. Issuing Notice for EGM

  • Minimum of 21 days before the meeting
  • Should include agenda, date, venue, and an explanatory statement as per Section 102 of the Companies Act

3. Holding the EGM

  • Conduct the EGM on the scheduled date
  • Pass an ordinary resolution to increase authorised share capital
  • Pass a special resolution if the AOA needs to be altered
  • Update the MOA to reflect the new capital limit

4. Filing SH-7 with ROC

  • File Form SH-7 within 30 days of passing the resolution
  • Attach:
    • Altered MOA
    • Copy of the ordinary/special resolution
    • Board resolution
    • Explanatory statement
  • Pay the required government fees and stamp duty

Documents Required

  • Board Resolution (certified copy)
  • EGM Notice with explanatory statement
  • Shareholder’s Resolution (ordinary/special)
  • Altered MOA and AOA (if amended)
  • DSC of an authorised director
  • Proof of fee and stamp duty payment

Bright Advis collects and verifies every document before uploading to ensure compliance and faster approval.

Post-Increase Compliance

  • Update the Register of Members and Register of Share Capital
  • Modify the company’s records for future filings
  • Notify investors, banks, and stakeholders if necessary

Our team ensures your documentation is audit-ready for future investment or compliance checks.

Penalties for Non-Compliance

  • Late fees for SH-7 filing
  • ROC rejection or legal notices
  • Invalid issuance of shares
  • Penalties on directors and the company

Bright Advis ensures zero-delay compliance to avoid these legal complications.

FAQs

Q1. Is shareholder approval necessary for increasing authorised capital?
Yes, an ordinary resolution must be passed at an EGM.
Q2. Can a company increase authorised capital multiple times?
Yes, there is no restriction as long as procedure is followed each time.
Q3. What is the government fee for capital increase?
It varies based on the new capital slab. Stamp duty may also apply.
Q4. What happens if SH-7 is filed late?
A daily penalty is levied until the form is filed correctly.
Q5. Can Bright Advis help with both capital increase and share allotment?
Absolutely. We provide end-to-end assistance including SH-7 and PAS-3 filings.

File Your Share Capital Increase with Bright Advis

Don’t let paperwork delay your growth. Let Bright Advis take care of your increase in authorised share capital professionally and accurately.

  • Company Law Experts & CA/CS Assistance
  • End-to-End Filing Support: SH-7, MOA, AOA
  • Transparent Pricing & Compliance Reminders

Secure your company’s future funding today—start your share capital increase process with Bright Advis.



Why Bright Advis

There are many reasons why clients choose Bright Advis, but from our experience we have listed the four main reason why you should go with us.

Bright & Knowledgeable

Bright Advis delivers high quality financial services by a team of bright and knowledgeable experts.

Always happy to help

Bright Advis commit to provide dedicated support and assistance to our clients.

Professional & Approachable

We maintain a high level of professionalism while being easily approachable for our clients.

Easy & Quick

We focus on streamlining and simplifying the complex processes for our clients.

Frequently Asked Questions

Increasing Authorized Capital typically involves amending the company’s Memorandum of Association (MOA) and Articles of Association (AOA) through a special resolution passed by the shareholders. The company then submits the necessary documents to the regulatory authorities for approval.

A company may consider increasing its Authorized Capital to accommodate future growth plans, facilitate fundraising efforts, attract investors, enhance creditworthiness, or comply with regulatory requirements.

The steps involved in increasing Authorized Capital include convening a board meeting to approve the proposal, calling for a shareholders’ meeting to pass a special resolution, filing the necessary forms and documents with the Registrar of Companies (ROC), and obtaining approval from the ROC.

Yes, the process of increasing Authorized Capital is governed by the Companies Act, 2013, and the rules prescribed therein. Companies need to comply with the provisions of the Act, follow the prescribed procedures, and obtain approvals from the regulatory authorities.

  1. Increasing Authorized Capital does not dilute the ownership stake of existing shareholders. It simply allows the company to issue additional shares in the future if needed, without requiring further approval from shareholders to amend the MOA and AOA.
  1. The timeline for increasing Authorized Capital depends on various factors, including the company’s compliance record, the efficiency of the regulatory authorities, and the complexity of the transaction. Typically, it may take several weeks to complete the entire process.

Bought Together

There are many reasons why clients choose Bright Advis, but from our experience we have listed the four main reason why you should go with us.

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