Increase Authorised Capital of Company

A company can increase its authorized capital by following the prescribed procedures under company laws. It involves passing necessary resolutions by shareholders and filing documents with the ROC. The registration fee payable to the ROC depends on the authorized capital of the company.

Increase of Authorized Capital


A company can increase its authorized capital by following the prescribed procedures under company laws. It involves passing necessary resolutions by shareholders and filing documents with the ROC. 

The registration fee payable to the ROC depends on the authorized capital of the company. Hence, every time there is an increase in authorized capital, the differential fee is payable to the ROC. Certain states in India mandate the payment of stamp duty on authorized capital. Therefore, the required stamp duty is also required to be paid by companies while increasing the authorized capital in those states.

The increase in authorized capital involves amending the company’s MOA. In certain cases, the Articles of Association (AOA) of the company also contains the authorized capital clause. In such cases, the respective clause in the AOA also needs to be changed for every increase in capital.

Procedure for Increase of Authorized Capital


Board Meeting

Convene a Board Meeting to consider the proposal and call for a General Meeting.

General Meeting

Conduct the General Meeting and pass the requisite resolutions for increase in capital.

Resolutions for Filing with ROC

Prepare the minutes of the meeting and get the process/documents vetted by certified CS / CA / CWA professionals

Filing Returns with ROC

Form SH-7 to be filed with Registrar of Companies certified by a professional with the ROC within 30 days of passing the resolution for increase in capital with the requisite fee for the increase in capital. Also, the copy of resolution in Form MGT-14 (in case it involves amendment to the AOA) certified by a professional with the ROC within 30 days of passing the resolution.

Payment of ROC Fee and Stamp Duty

Required Fee to be paid to the ROC towards the increase of Capital and Stamp duty on Articles also to be paid online / NEFT

How to make the payment of Fee to ROC

Fee can be paid through online banking or via NEFT to MCA Bank Accounts.

Change MOA and AOA

Make necessary changes in the MOA and AOA of the company.

Requirements


Capital can be increased at any point of time

Board Meeting to Call General Meeting

Pass resolution at General Meeting

Filing of Returns and Payment of Fee to ROC

Documents Required


Board Meeting

Board Meeting to be convened with due Notice in compliance with Secretrial Standards

  • Notice of Board Meeting

  • Board Attendance Sheet

  • Minute of Board Meeting

  • Board Resolutions for Filing

General Meeting Records

After the Board Meeting, a General meeting of shareholders to be convened with due notice as per Articles

  • Notice of General Meeting

  • General Meeting Attendance Sheet

  • Minutes of General Meeting

  • Resolutions for Filing

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FAQ

Frequently Asked Questions on Increase Authorised Capital of Company

What is authorized capital?

Authorized Capital or Registered Capital of a company is the upper limit of capital for which a company can issue shares and collect money from shareholders. Authorized capital can be enhanced at any time by passing a resolution at a meeting of shareholders.

What is issued capital?

Issued capital refers to the total amount of capital issued by the company to shareholders. The issued capital cannot be more than the authorized capital.

What is unissued capital?

Unissued capital refers to the portion of authorized capital that is unissued. The total of issued and unissued capital should be equal to the authorized capital.

What is the fee payable for increase of authorized capital?

The fee is based on the paid-up capital of the company. You can compute the fee using our online fee calculator.

What is share premium? Is it a part of share capital?

Share premium is not a part of share capital and is the additional amount collected from shareholders. It will be kept in a separate account and be used only for certain specific purposes. Share premium will not be considered for calculation of authorized/issued/paid-up and unissued capital.

Who can increase the authorized capital?

Shareholders of a company with majority voting rights can increase the authorized capital of a company.

What is the process for increasing authorized capital?

A company can increase the authorized capital by an ordinary resolution passed by shareholders. After the increase, the company needs to file a notice of increase with the ROC and pay the differential fee for the authorized capital.

Is it mandatory to allot shares after increasing authorized capital?

There is no need to allot shares on increase of authorized capital. There is no time limit for keeping the authorized capital unissued. The company can issue shares at its discretion, subject to the Companies Act and other regulations.

Increase Authorised Capital of Company

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