Procedure for Increase in Authorised Capital (Form SH-7 Filing)

Relevant Provisions

• Section 61(1)(a) of the Companies Act, 2013.
• Section 64(1)(a) of the Companies Act, 2013.
• Rule 15 of the Companies (Share Capital and Debentures) Rules, 2014.
• Articles of Association of the Company.

How to Increase the Authorised Share Capital of a Company? Procedure

In case, the Articles of Association does have necessary provisions or authority for the company to increase its authorised share capital.

• Issue the notice and agenda in writing, by giving not less than 7 days’ notice, for conducting the meeting of the board of directors.

• Convene the meeting of the board of directors on the scheduled day.

• At the board meeting, mainly 2 items of business will be dealt with in relation to the increase in authorised share capital:
i. Approving the alteration of the memorandum of association to increase the authorised share capital;
ii. Fixing the day, date, time and place for convening a general meeting in this regard, approving the draft notice of general meeting and authorising any official to circulate the notice.

• Issue the notice in writing at least 21 clear days before the date of the general meeting along with an explanatory statement as required under section 102.

• Convene the general meeting of the members on the scheduled day.

• Ordinary resolution needs to be passed for alteration of the memorandum for increase in the authorised share capital. 

• File with the ROC within 30 days of passing the ordinary resolution, the Form SH-7 with the annexures viz. copy of the resolution for alteration of capital, altered memorandum of association, etc and make the payment of the necessary stamp duties online at MCA site.

• After the form is approved by the ROC, the changed status of the authorised capital of the company can be checked at MCA site.

• The ROC may reject the application for any deficiencies/violation of law or can ask for certain clarification or missing documents/information, in which case the form has to be resubmitted at the MCA site.

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Formats of the Board Resolution and Ordinary Resolution to Increase the Authorised Share Capital - available here

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In case, the Articles of Association does not have provisions or authority for the company to increase authorised share capital.

If such authority is not provided in the articles, then the articles have to be amended to include provisions authorising the company to increase its authorised share capital.

• Issue the notice and agenda in writing, by giving not less than 7 days’ notice, for conducting the meeting of the board of directors.

• Convene the board meeting on the scheduled day.

• At the board meeting, mainly 3 items of business will be dealt with in relation to the increase in authorised share capital.
i. Approving the alteration of the articles for addition of provisions regarding increase in the authorised share capital;
ii. Approving the alteration of the memorandum for increase in the authorised share capital;
iii. Fixing the day, date, time and place for convening a general meeting in this regard, approving the draft notice of general meeting and authorising any official to circulate the notice.

• Issue the notice in writing at least 21 clear days before the date of the general meeting along with an explanatory statement as required under section 102.

• Convene the general meeting of the members on the scheduled day.

• Special resolution needs to be passed for alteration of the articles to add a new article providing provisions and authority to the company for 'increase in the authorised share capital'.

• Ordinary resolution needs to be passed for alteration of the memorandum for increase in the authorised share capital.

• File the Form MGT-14 with ROC within 30 days of passing the special resolution for alteration of articles.

• Within 30 days of the date of general meeting where the ordinary resolution was passed, Form SH-7 has to be filed with the ROC along with the annexures viz. copy of the resolution for alteration of capital, altered memorandum of association, etc and necessary payment of stamp duties has to be done.

• After the form is approved by the ROC, the changed status of the authorised capital of the company can be checked at MCA site.

• The ROC may reject the application for any deficiencies/violation of law or can ask for certain clarification or missing documents/information, in which case the form has to be resubmitted at the MCA site.