Increase in authorised capital, explained
This needs authority in the articles, an ordinary resolution of the members altering the capital clause of the memorandum under section 61(1)(a), and Form SH-7 with the Registrar within 30 days of the resolution under section 64(1).
The MCA fee for SH-7 is the registration fee on the new total authorised capital minus the registration fee on the existing authorised capital. Stamp duty on the increase is charged by your state, under its own stamp law, and is not an MCA fee.
Once the ceiling is raised, the board allots the new shares and the company files PAS-3, the return of allotment, within 30 days of the allotment.
| Term | What it means |
|---|---|
| Ordinary resolution | A members' resolution carried by more votes in favour than against. It is enough for the capital increase, if the articles allow one. |
| Form SH-7 | The notice of altered share capital, filed within 30 days of the resolution with the differential MCA fee and the state stamp duty paid. |
| PAS-3 | The return of allotment, filed within 30 days of allotting the new shares. |
Authorised, issued and paid-up capital: what is actually changing
An increase in authorised capital raises a ceiling. It does not put a rupee into the company. Three figures sit in every set of accounts, and only the first one changes here.
| Figure | What it means | Where it lives | Changes with SH-7? |
|---|---|---|---|
| Authorised capital | The maximum the company may issue | Capital clause of the memorandum | Yes, this is what SH-7 records |
| Issued and subscribed capital | The shares actually offered and taken up | Register of members, MGT-7 | No, it changes on allotment |
| Paid-up capital | The money actually received for those shares | Balance sheet, PAS-3 | No, it changes on allotment |
Every MCA fee that scales with capital, including the SH-7 fee itself, keys off authorised capital, not paid-up capital. That is why an increase has a cost even before a single share is issued.
You need an increase when the shares you are about to allot, added to the shares already issued, would cross the authorised figure. Typical triggers: a priced funding round, a bonus issue, conversion of debentures or a convertible note, or bringing in a new co-founder with a meaningful stake. If the increase is for a funding round, see shareholders agreement for the investor documents that go with it.
The law, the meetings and the forms
Two sections govern this: section 61(1)(a) allows the alteration, section 64(1) requires the notice. Here is the sequence, with what is due when.
| Step | What happens | Form | Time limit |
|---|---|---|---|
| 1. Check the articles | Confirm the articles permit an increase. If they do not, alter them first | Special resolution, then MGT-14 | MGT-14 within 30 days of the special resolution |
| 2. Board meeting | Board approves the increase and calls the general meeting | None | Notice of the meeting as the articles require |
| 3. General meeting | Members pass the ordinary resolution altering the capital clause (section 61(1)(a)) | None | 21 clear days' notice, or shorter notice with the consent the Act requires |
| 4. Notice to the Registrar | Altered share capital notified with the altered memorandum and the resolution | SH-7 | Within 30 days of the resolution (section 64(1)) |
| 5. Allotment | Board allots the new shares under the chosen route | PAS-3 | Within 30 days of the allotment |
| 6. Records | Register of members, share certificates within the statutory period, next annual return | MGT-7 or MGT-7A | With the annual filings |
An ordinary resolution to increase authorised capital does not need MGT-14. MGT-14 comes in only where a special resolution is passed, for example to alter the articles first. Many providers file MGT-14 for the capital increase as a matter of course; it is not required.
For a one person company, there is no general meeting. The member's decision is entered in the minutes book and signed, and that date is the resolution date for the 30-day SH-7 count.
Send your documents by email or WhatsApp. We check the existing memorandum, the articles and the resolution wording before anything is filed.
Government fee on SH-7: the difference-of-fee rule
There is no flat fee for SH-7. The fee is the registration fee computed on the new total authorised capital, minus the registration fee computed on the existing authorised capital, using the incorporation fee slabs in the Table of Fees.
Two consequences worth planning around:
- The jump matters more than the destination. Going from ₹1,00,000 to ₹10,00,000 costs less than going from ₹10,00,000 to ₹1,00,00,000, because the slabs are progressive.
- Headroom is cheaper bought once. Two increases of ₹50,00,000 each cost more in professional time than one increase of ₹1,00,00,000, and the MCA arithmetic gives you no discount for splitting.
We run your two figures through the MCA fee calculator and put the exact amount in your quote. We do not publish a worked table, because the published slab figures above ₹15,00,000 of authorised capital are not consistent across sources and a wrong number here is a wrong payment.
State stamp duty on the increase is charged under the stamp law of the state where your registered office is, usually by reference to the increased capital. Rates differ from state to state and there is no central rate, so we confirm your state's figure with the MCA fee before you pass the resolution.
Fees
Our professional fee for an increase in authorised share capital is ₹1,999. The MCA fee and the stamp duty depend on your numbers and your state.
| What | Amount |
|---|---|
| Regikart professional fee: EGM notice and explanatory statement, ordinary resolution, altered memorandum, SH-7 filing and master-data check | ₹1,999 |
| MCA fee on SH-7 | Registration fee on the new authorised capital minus the fee on the existing authorised capital, per the Table of Fees. Confirmed in your quote |
| State stamp duty on the increase | Charged by your state under its own stamp law. Confirmed in your quote |
| MGT-14, where the articles must be altered first | ₹200 to ₹600 by authorised capital |
| PAS-3 for the allotment that follows | ₹200 to ₹600 by authorised capital |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 22 September 2026.
If SH-7 is filed late
Late SH-7 costs twice: an additional fee on the form, and a penalty under section 64(2). Keep the two apart when you budget.
Additional fee (a multiple of the normal fee)
| Delay after the 30-day due date | Additional fee |
|---|---|
| Up to 30 days | 2 × normal fee |
| More than 30 and up to 60 days | 4 × normal fee |
| More than 60 and up to 90 days | 6 × normal fee |
| More than 90 and up to 180 days | 10 × normal fee |
| More than 180 days | 12 × normal fee |
Penalty (section 64(2))
If the notice is not filed within 30 days, the company and every officer in default are liable to a penalty of ₹500 for each day the default continues, subject to a maximum of ₹5,00,000 for the company and ₹1,00,000 for an officer in default. The amount was reduced from ₹1,000 a day by the Companies (Amendment) Act, 2020.
There is a practical consequence too. Until SH-7 is approved, the MCA master data still shows the old ceiling, and an allotment beyond it is open to challenge. Investors and their diligence teams check this.
Allotting the new shares
SH-7 creates room. A separate decision issues the shares. The route decides the paperwork.
| Route | When it is used | Key requirement |
|---|---|---|
| Rights issue, section 62(1)(a) | Offering shares to existing shareholders in proportion to their holdings | Offer letter with an acceptance window; PAS-3 after allotment |
| Private placement, section 42 | Offering shares to identified investors | Special resolution, private placement offer letter in PAS-4, separate bank account, PAS-3 after allotment |
| Preferential allotment | Issuing to a specific person at a price supported by valuation | Valuation report and special resolution |
| Bonus issue, section 63 | Capitalising reserves, no money comes in | Articles must permit it; PAS-3 after allotment |
If an allottee lives outside India, the allotment must meet FEMA pricing rules and be reported to the Reserve Bank in Form FC-GPR on the FIRMS portal within 30 days of allotment, supported by a valuation certificate. There is no filing fee, but a late submission fee applies on delay. See our FC-GPR filing and share valuation under Rule 11UA pages.
Mistakes we see
- Allotting first, filing later. The board allots shares that take paid-up capital above the old authorised figure, then asks us to "regularise" it. Raise the ceiling first.
- Reading the wrong articles. Older articles sometimes fix the capital figure, which makes a special resolution and MGT-14 unavoidable before the increase.
- Budgeting only the MCA fee. State stamp duty on the increase is frequently the larger of the two.
- Forgetting PAS-3. SH-7 gets filed, the money comes in, and the return of allotment is missed. PAS-3 is due within 30 days of the allotment.
- Buying just enough headroom. Companies that increase capital twice in a year pay for the exercise twice.
Not sure how much headroom you need? Send us your current authorised capital and the amount you plan to raise, and we will confirm the new ceiling, the MCA fee and the stamp duty.