Increase Authorised Share Capital
Expand your company's authorised capital with precision — EGM ordinary resolution, Form MGT-14 within 30 days, altered MOA, and Form SH-7 filing. Essential before funding rounds, ESOP creation, bonus issuance, or debt-to-equity conversion.
MGT-14 + SH-7
Forms
Within 30 Days of EGM
MGT-14 Due
7-10 Business Days
Timeline
₹4,999
Starting At
Registrar of Companies
Authority
Ordinary Resolution
Resolution
What is Increase in Authorised Share Capital?
Authorised share capital is the maximum value of shares a company can issue as specified in its Memorandum of Association (MOA). A company cannot issue paid-up capital exceeding its authorised capital without first increasing it through an Ordinary Resolution and filing with the RoC.
The process under Section 61 of the Companies Act, 2013 requires: (1) EGM Ordinary Resolution approving the increase; (2) Form MGT-14 filed within 30 days; (3) Altered MOA reflecting new capital; and (4) Form SH-7 filed with the Registrar of Companies within 30 days.
Most Indian startups incorporate with ₹1-10 lakh authorised capital and need to increase it before their first funding round, ESOP pool creation, or convertible note conversion. ROC filing fees on SH-7 and stamp duty on the altered MOA are additional to professional fees.
Common Triggers for Capital Increase
Angel / Seed Funding Round
Need headroom for new investor shares
Series A / B Investment
Institutional investors need large block
ESOP Pool Creation
Typically 5-15% reserved for employees
Convertible Note Conversion
CCDs/NCDs converting to equity shares
Bonus Share Issuance
Paid-up capital cannot exceed authorised
Rights Issue to Existing Members
Additional shares to existing shareholders
Co-Founder Equity Issuance
New co-founder joining needs shares
Who Needs to Increase Authorised Capital?
Any company planning new share issuances must first verify and increase its authorised capital if needed.
Companies Raising Investment
Before any equity funding round (seed, Series A, angel), confirm you have enough authorised capital headroom to issue new shares. Most seed companies need to increase from ₹1 lakh to ₹10-100 lakh.
Companies Implementing ESOP Schemes
ESOP pools typically represent 5-15% of the company. If the authorised capital is insufficient to accommodate the ESOP pool plus future rounds, increase authorised capital first.
Startups Onboarding Co-Founders
When issuing equity to new co-founders or early team members, validate that the authorised capital is sufficient to accommodate the new shareholding at the agreed valuation.
Companies Converting Debt to Equity
Convertible notes (CCDs, OCDs) that are set to convert require adequate authorised capital at the time of conversion. Plan ahead and increase capital well before the conversion date.
Companies Issuing Bonus Shares
Bonus issuances require authorised capital to be at least equal to the post-bonus paid-up capital. Calculate and increase authorised capital before passing the bonus resolution.
Companies at 90%+ of Authorised Limit
If your paid-up capital is approaching the authorised capital limit, proactively increase the authorised capital before conducting any further share issuances to avoid MCA compliance issues.
Why Increase Authorised Share Capital?
Create the headroom your company needs for growth, funding, and employee equity.
Enables New Equity Fundraising
When raising investment rounds, the company must have sufficient authorised capital to issue new shares to investors. Increasing authorised capital is the prerequisite for any equity fundraising.
Create or Expand ESOP Pool
Employee Stock Option Plans require reserved, unissued shares. An increase in authorised capital creates the headroom to grant ESOPs to employees, advisors, and key hires.
Debt-to-Equity Conversion
When converting outstanding loans or debentures into equity shares (as part of restructuring or NCD redemption), sufficient authorised share capital must exist to accommodate the new shares.
Bonus Share Issuance
Issuing bonus shares (capitalisation of reserves) requires sufficient authorised capital. A company cannot issue bonus shares that would cause paid-up capital to exceed authorised capital.
Rights Issue and Preferential Allotment
Companies issuing shares to existing shareholders (rights issue) or to specific investors (preferential allotment under SEBI Chapter V) need adequate authorised capital as a baseline.
Quick and Straightforward Process
Increasing authorised capital requires only an ordinary resolution — not a special resolution. It is one of the most straightforward MCA filings with a 7-10 business day turnaround.
Strengthens Balance Sheet Optics
A higher authorised capital signals ambition and capacity for growth to lenders, investors, and counterparties who review the company's public MCA records during due diligence.
No Impact on Existing Shareholding
Merely increasing the authorised capital does not dilute existing shareholders or affect their economic rights. It only creates headroom for future share issuances.
Capital Increase Process - Step by Step
From EGM resolution to updated MCA records — completed in 7-10 business days.
Check Current Authorised Capital
Verify the current authorised share capital from the Memorandum of Association (MOA) and compare it with the paid-up capital. Determine the required increase amount based on planned funding or ESOP requirements.
Board Meeting and Resolution
Convene a Board of Directors meeting and pass a Board Resolution recommending the increase in authorised share capital and recommending it for shareholder approval at an EGM or through postal ballot.
EGM or Postal Ballot
Hold an Extraordinary General Meeting (EGM) or conduct a postal ballot. Pass an Ordinary Resolution (simple majority) approving the increase in authorised capital and alteration of the MOA accordingly.
Calculate ROC Filing Fee
The ROC charges a filing fee on Form SH-7 based on the amount of increase in authorised capital. Fee slabs range from ₹500 (for increase up to ₹1 lakh) to ₹1,500 for increase up to ₹10 lakh, and higher for larger increases.
File MGT-14 (Special Resolution Filing)
File Form MGT-14 on the MCA portal within 30 days of passing the ordinary resolution at the EGM. Attach certified copies of the EGM notice, minutes, and the ordinary resolution.
File SH-7 (Notice of Capital Increase)
File Form SH-7 on the MCA portal within 30 days of passing the resolution. This form notifies the Registrar of the increase in authorised share capital. Attach the altered MOA reflecting the new capital.
Pay Stamp Duty on Altered MOA
Pay the applicable stamp duty on the altered Memorandum of Association as per the Stamp Act of the state in which the registered office is located. This is additional to the ROC filing fee.
Updated MOA and MCA Records
Once SH-7 is processed, the MCA portal updates the company's authorised share capital. The company can now proceed with the planned share issuance — fundraising, ESOP grant, or bonus issuance.
Documents Required
We draft all resolutions, altered MOA, and file both MGT-14 and SH-7 on your behalf.
Stamp Duty on Altered MOA
Stamp duty on the altered MOA is payable under the relevant State Stamp Act. Rates vary by state — typically 0.1% to 0.2% of the increase in authorised capital. For example, in Maharashtra, stamp duty on MOA alteration for a ₹10 lakh capital increase is approximately ₹1,000. This is separate from professional fees and ROC filing fees.
Starting at ₹4,999
Professional fee inclusive of Board Resolution, EGM documents, altered MOA, MGT-14 and SH-7 filing. ROC filing fees and stamp duty are charged at actuals.
Timeline:
Frequently Asked Questions
Everything about increasing authorised share capital, MGT-14, SH-7, and MCA compliance.
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