How to Increase Authorised Share Capital of a Company in India
Increasing a company's authorised share capital — the maximum capital it is allowed to raise — requires a board resolution, an ordinary resolution passed by shareholders (assuming the Articles of Association permit it), and filing Form SH-7 with the ROC, along with government fees and stamp duty that scale with the increase amount.
Why companies increase authorised capital
A company can only issue shares (paid-up capital) up to its authorised limit. Raising a new funding round, converting debt to equity, or issuing ESOPs beyond the current limit all require increasing authorised capital first.
Step-by-step process
- Check the Articles of Association (AOA) permit an increase — if not, amend the AOA first
- Convene a board meeting and pass a resolution recommending the increase
- Call a general meeting (or use a written resolution route where applicable) and pass an ordinary resolution approving the increase
- File Form SH-7 with the ROC within 30 days of passing the resolution, along with the resolution copy and altered Memorandum of Association
- Pay the applicable ROC fee and stamp duty, calculated on the incremental capital
Fees and stamp duty
ROC fees are charged on a slab basis tied to the new authorised capital amount, and stamp duty rates differ by state — Delhi, Maharashtra and Karnataka all apply different rates, so the total cost varies meaningfully depending on where the registered office is located.
What happens after the increase is approved
Once SH-7 is approved, the company can proceed to actually allot new shares (if raising funds) by filing a separate return of allotment (Form PAS-3) — increasing authorised capital alone doesn't issue shares, it just raises the ceiling.
Common mistake: confusing authorised and paid-up capital
Many founders conflate the two. Authorised capital is the legal maximum; paid-up capital is what's actually been issued and received from shareholders. You can have ₹10 lakh authorised capital with only ₹1 lakh paid-up — until shares are actually allotted.
Raising a funding round? Our ROC compliance team handles the capital increase and share allotment filings together.