Authorized Capital Increase

If your business is growing, looking to raise new funds, bringing on new investors, or dealing with regulatory needs, you might need to boost your authorised capital. At G K B & Associates, we guide you through planning and carrying out authorised capital increases carefully. We draft the necessary resolutions, update your company records, and make sure you're fully compliant with MCA requirements.

Benefits of Increasing Authorised Capital

Facilitate Fundraising – Issue more shares to investors for business expansion.

Support Business Growth – Strengthen financial capacity for large projects.

Improve Debt-Equity Ratio – Reduce dependency on loans by raising more equity.

Enable Employee Stock Options (ESOPs) – Allocate shares for employee incentives.

Stay Investor-Ready – Remove capital limitations before investment discussions.

Documents Needed for Authorised Capital Increase

From the Company:

1. Certificate of Incorporation
2. Current Memorandum of Association (MoA) & Articles of Association (AoA)
3. Digital Signature Certificate (DSC) of a director/authorized signatory
4. Board Resolution approving the increase

5. Notice of Extraordinary General Meeting (EGM)
6. Shareholders’ Special Resolution approving the amendment of MoA
7. Updated MoA reflecting the new authorised capital

Supporting Requirements:

1. Director Identification Number (DIN) of signing directors

2. Proof of payment of MCA filing fees & stamp duty

Our Process

Understanding Your Needs & Company Rules Check

We review your business needs and check your Articles of Association to identify and guide on any amendments needed.

Writing Resolutions & Getting Shareholder Agreement

We draft the Board Resolution and organize the EGM for shareholders to pass the Special Resolution approving the increase.

Submitting to the Relevant Authority

We file Form SH-7 with the MCA, including updated AoA, resolutions, and all supporting documents.

When You Must Increase Authorised Capital

1. Before issuing shares beyond your current authorised capital
2. Before allotting shares to investors in funding rounds
3. Before implementing ESOPs or bonus share issues

Legal Basis

Governed by Sections 61–64 of the Companies Act, 2013. Requires amendment of the Capital Clause in the MoA.

Timeframe: Typically 3–7 working days after documentation and shareholder approval.

Filing Fees & Stamp Duty: Payable to MCA based on the amount of capital increase and state stamp duty rates.

Frequently Asked Questions

What does authorised capital mean in a company?

Authorised capital is the maximum amount of share capital a company is allowed to issue to its shareholders as per its Memorandum of Association (MOA).

Why is increasing authorised capital necessary?

A company needs to increase its authorised capital if it plans to issue more shares, raise funds from investors, expand business operations, or meet statutory capital requirements.

What is the legal procedure for increasing authorised capital in India?

The process includes:

Holding a Board Meeting for approval
Convening an Extraordinary General Meeting (EGM)
Passing a shareholders’ resolution
Filing Form SH-7 with the Registrar of Companies (ROC)
Amending the MOA and AOA accordingly

What documents are required for increasing authorised capital?

Key documents include:

Notice and agenda of board/general meetings
Shareholders’ resolution
Altered MOA & AOA
ROC filing forms (SH-7 and MGT-7)

Is government approval required to increase authorised capital?

No separate government approval is required, but the company must pass the resolution and file the necessary forms with the ROC under the Companies Act, 2013.

Authorized Capital Increase