Authorized Capital Increase | Savlana Init

MCA · Authorised Capital

Authorised Capital Increase — Expanding the Ceiling on What Your Company Can Issue.

Increasing a company's authorised capital requires amending the MOA capital clause by special resolution, followed by MGT-14 and Form SH-7 filings with the applicable stamp duty. We manage the end-to-end process.

Authorised capital is the maximum amount of share capital that a company is permitted to issue as set out in its Memorandum of Association. It acts as a ceiling — the company cannot issue or allot shares beyond this limit without first increasing it. When a company needs to raise fresh equity capital, issue shares to new investors, expand an ESOP pool, or convert debt to equity beyond the existing ceiling, the authorised capital must be increased first.

The process under the Companies Act, 2013 requires a special resolution of shareholders to amend the Capital Clause of the MOA. The special resolution and the altered MOA must then be filed with the RoC via Form MGT-14 within 30 days. Subsequently, Form SH-7 must be filed to formally record the increase in authorised capital with the RoC, along with the applicable stamp duty — which is levied on the increased portion and varies by state.

If the AOA also contains a reference to the authorised capital limit, it too will need to be amended alongside the MOA. Once SH-7 is acknowledged, the increased authorised capital is live on MCA and the company can proceed with the actual share allotment process (Form PAS-3) to issue shares up to the new limit. We manage the full process including resolutions, both MCA filings, and stamp duty computation.

Our Capital Increase Services

Capital Requirement Assessment

Reviewing the current authorised capital and proposed increase against planned share issuance requirements.

MOA Capital Clause Amendment

Amending the Capital Clause of the Memorandum of Association to reflect the increased authorised limit.

Board Resolution Drafting

Preparing the board resolution calling the EGM and recommending the increased capital to shareholders.

Special Resolution & MGT-14

Drafting and filing the special resolution and altered MOA with the RoC within 30 days of passing.

SH-7 Filing

Filing Form SH-7 to formally record the increased authorised capital with the RoC and pay applicable stamp duty.

Stamp Duty Computation

Calculating the correct stamp duty on the increased portion of authorised capital as per the applicable state rate.

AOA Amendment (if required)

Amending the Articles of Association where they also reference the authorised capital limit.

Share Allotment Planning

Post-increase guidance on the actual share allotment process (PAS-3) to issue shares up to the new authorised limit.

Our Process

Capital Position Review

We review the MOA capital clause and the company's current paid-up capital against the planned increase requirement.

Board & Shareholder Resolution

Board resolution calling the EGM; special resolution passed by shareholders authorising the increased authorised capital.

MGT-14 Filing

Certified special resolution and altered MOA filed with the RoC within 30 days of the resolution date.

SH-7 Filing & Stamp Duty

Form SH-7 filed with applicable stamp duty on the increased portion of authorised capital.

Confirmation & Updated MOA

RoC records the increase; updated MOA with the revised Capital Clause prepared and shared.

Why It Matters

✓Current authorised and paid-up capital reviewed against future issuance requirements

✓MOA Capital Clause amended to the precise increased figure

✓Board and special resolutions prepared to the statutory standard

✓MGT-14 filed within the 30-day statutory window to avoid penalties

✓Stamp duty on increased capital calculated correctly per applicable state rate

✓SH-7 filed promptly to record the increase on MCA

✓AOA also updated where it references the capital limit

✓Post-increase share allotment guidance (PAS-3) provided

Frequently Asked Questions

Authorised capital is the ceiling set in the MOA on the total share capital a company may issue. It must be increased before the company can allot shares or convertible instruments beyond the current authorised limit.

Authorised capital is the MOA-prescribed ceiling on total share issuance. Paid-up capital is the amount actually issued and received from shareholders. Paid-up capital can never exceed authorised capital.

There is no statutory ceiling on the amount of increase — the company can increase authorised capital to any amount, provided the required resolutions are passed and the applicable stamp duty and RoC fees on the increased portion are paid.

Form MGT-14 (special resolution and altered MOA) must be filed within 30 days of the resolution. Form SH-7 is then filed to formally record the increased authorised capital and pay the applicable fees and stamp duty.

Yes — stamp duty is payable on the increased portion of authorised capital under the applicable state Stamp Act. The rate varies by state and must be paid before or at the time of filing Form SH-7.

No — increasing authorised capital only raises the ceiling. The actual issuance of additional shares requires a separate allotment process (board resolution followed by Form PAS-3) after the capital is increased.

Need to increase your company's authorised capital?

We'll prepare the resolutions, calculate the stamp duty, and file MGT-14 and SH-7 to get the increased capital recorded on MCA.