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

1. Check the Articles of Association (AOA) permit an increase — if not, amend the AOA first
2. Convene a board meeting and pass a resolution recommending the increase
3. Call a general meeting (or use a written resolution route where applicable) and pass an ordinary resolution approving the increase
4. File Form SH-7 with the ROC within 30 days of passing the resolution, along with the resolution copy and altered Memorandum of Association
5. 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.