Table of Contents
Learn how to legally increase the authorised share capital of your company in India under Companies Act, 2013—Complete with latest forms, board resolution formats, and ROC filing steps (Updated for V3 MCA Portal).
What is Authorised Share Capital?
Authorised Share Capital is the maximum value of equity shares that a company can legally issue to shareholders, as per Clause V of its Memorandum of Association (MOA).
- You cannot issue shares beyond this limit.
- To issue more shares for new investment, employee ESOP, rights issue etc., first increase your authorised capital.
🧾 Legal Provisions at a Glance
| Law | Purpose |
| Section 2(8) | Defines Authorised Capital |
| Section 61(1)(a) | Power to increase Authorised Share Capital |
| Section 64 | Mandatory filing with ROC |
| Rule 15 of Companies (Share Capital and Debentures) Rules, 2014 | Procedural aspects |
| Articles of Association (AOA) | Must permit capital alteration |
🧠 Key Pre-Checks Before You Start
- ✅ Check AOA – Does it allow increase in authorised share capital? If not, amend it via Special Resolution.
- ✅ Update MOA Clause V – Must reflect new capital.
- ✅ Verify Stamp Duty Payable – Varies by state, mandatory before SH-7 filing.
✅ Step-by-Step Process to Increase Authorised Share Capital
Step 1: Board Meeting – Approve Proposal
Agenda:
- Propose increase in authorised share capital
- Fix date & time for EGM
- Approve draft notice & explanatory statement
Sample Board Resolution:
“RESOLVED THAT pursuant to the provisions of section 64 (1) of the Companies Act 2013, and other applicable provisions, if any and subject to the approval of the members of the Company, the Authorized Share Capital of the company be and is hereby increased from Rs. 1,00,000- (Rupees One Lakh only) divided into 10,000 (Ten thousand) Equity share of Rs. 10 each to Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) divided into 2,50,000 (Two Lakh Fifty Thousand) Equity shares of Rs. 10/- each.”
RESOLVED FURTHER THAT, Clause V of the Memorandum of Association of the Company be and is hereby altered to read as follows:
The authorized share capital of the company is Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) divided into 2,50,000 (Two Lakh Fifty Thousand) Equity shares of Rs. 10/- (Rupees Ten ) each.
RESOLVED FURTHER THAT an Extra Ordinary General Meeting of the members of the Company be conveyed on 15/07/2025 at its registered office of the company at 11:00 A.M. for according the approval of the members and any of the Director of the Company be and is hereby authorized to issue notice of the Extra ordinary General Meeting in this regard as per draft notice placed before the table of this meeting and initialed by the chairman for the purpose of to do all such things, acts and deeds which may deem necessary to give effect to the above resolution.”
Step 2: Issue Notice of EGM to Shareholders
- Minimum 21 clear days required, unless consent is received for shorter notice (95% of shareholders in paid-up capital).
- Attach:
- Explanatory Statement (Sec 102)
- Draft Resolution
- Updated MOA draft
Step 3: Hold Extraordinary General Meeting (EGM)
Pass an Ordinary Resolution (Simple majority) for:
- Increasing Authorised Share Capital
- Amending MOA (Clause V)
Sample Wordings of Shareholder Resolution:
RESOLVED THAT pursuant to the provisions of section 61 and 64 and other applicable provisions, if any, of the companies Act 2013 (including any amendment thereto or re enactment thereof) and the rules framed there under, the consent of the members be and is hereby accorded, to increase the Authorised Share Capital from existing 1,00,000- (Rupees One Lakh only) divided into 10,000 (Ten Thousand) Equity share of Rs. 10 each to Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) divided into 2,50,000 (Two Lakhs Fifty Thousand) Equity shares of Rs. 10/- each each and each ranking pari-passu in all respect with the existing equity share of the company.
FURTHER RESOLVED THAT Clause V of the Memorandum of Association of the Company be and is hereby altered to read as follows:
The authorized share capital of the company is Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) divided into 2,50,000 (Two Lakhs Fifty Thousand) Equity shares of Rs. 10/- (Rupees Ten ) each.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors of the company (hereinafter referred to as “Board” which term shall include a Committee thereof or any director authorized for the purpose) be and is hereby authorized to take all such steps and actions and give such directions as may be in its absolute discretion deemed necessary and to settle any question that may arise in this regard, without being required to seek any further consent or approval of the shareholder or otherwise and that shareholder shall be deemed to have given their approval thereto expressly by the authority of this resolution.
Step 4: File ROC Form SH-7 via MCA V3 Portal
| Form | Purpose | Timeline |
| SH-7 | Intimation of increase in authorised capital | Within 30 days of EGM |
Attachments Required:
- Certified copy of EGM Resolution
- Notice of EGM with explanatory statement
- Altered MOA (signed)
- Altered AOA (if amended)
- Board Resolution (optional, good practice)
Step 5: Pay Stamp Duty & Filing Fee
- Stamp duty is state-specific and paid within SH-7 on MCA V3.
- Filing fee depends on the increase amount and existing capital.
👉 Refer MCA Fee Calculator for exact amounts.
✅ What Happens Next?
- MCA/ROC processes SH-7 and issues confirmation email with transaction details.
- Company’s Master Data is updated on MCA Portal reflecting the new authorised share capital.
⚠️ Common Mistakes to Avoid
| Mistake | Result |
| Not checking AOA permissions | Whole process invalid |
| Filing SH-7 late | Penalty under Section 403 |
| Incorrect MOA Clause | ROC may reject SH-7 |
| Using Special Resolution instead of Ordinary | Not legally required under Sec 61 |
🧾 Format Templates for Download (Customizable)
- ✅ Board Resolution for Capital Increase
- ✅ EGM Notice + Explanatory Statement
- ✅ Shareholder Resolution under Section 61
📌 FAQs
Q1: Do I need to amend AOA if it doesn’t allow increasing capital?
✅ Yes. Amend AOA by passing Special Resolution under Section 14 before increasing capital.
Q2: Is Ordinary Resolution enough?
✅ Yes. Under Section 61(1)(a), only an Ordinary Resolution is needed.
Q3: Is separate Form MGT-14 required?
❌ No. MGT-14 is not required for Ordinary Resolutions (only for Special Resolutions like AOA changes).
Q4: Can SH-7 be filed without paying stamp duty?
❌ No. Stamp duty is auto-calculated and must be paid through the MCA V3 portal.
Is company also needed to file MGT-14?
📘 Explanation:
Under the Companies Act, 2013, Form MGT-14 is required only when a Special Resolution or certain Board Resolutions are passed, such as:
- Alteration of Articles of Association
- Change of registered office across states
- Issue of debentures
- Borrowing beyond limits under Section 180
- Voluntary winding up, etc.
🚫 But for increasing Authorised Share Capital:
- Section 61(1)(a) only requires passing an Ordinary Resolution
- MGT-14 is NOT mandatory for ordinary resolutions
- Only SH-7 needs to be filed with ROC within 30 days along with:
- Certified resolution
- Updated MOA
- Stamp duty
⚠️ Exception:
🔺 If you are also amending the Articles of Association (AOA) to insert or modify the clause that allows increase of authorised capital, then you will pass a Special Resolution, and MGT-14 must be filed for that resolution only.
✅ Summary:
| Case | MGT-14 Filing? |
|---|---|
| Only increasing Authorised Capital via Ordinary Resolution (AOA already allows it) | ❌ Not Required |
| Amending AOA to allow increase (Special Resolution) | ✅ Required |
🧩 Final Thoughts
Increasing the Authorised Share Capital is a strategic move—whether for fresh equity infusion, startup funding, or expanding shareholding.
Ensure:
- All legal approvals are taken
- Forms are filed within time
- MOA is altered correctly
For error-free compliance, you can download ready-made formats or consult a Company Secretary (CS) for MCA filing.
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