Capital Structure Expansion
Increase in Authorized Share Capital (Form SH-7)
Expand your company's capital ceiling to onboard new investors, issue bonus shares, or infuse founder equity. We manage the entire capital expansion process under Sections 61 and 64 of the Companies Act, 2013: EGM notice, MOA amendment, and Form SH-7 filing.
- Alteration of MOA Capital Clause V
- Shareholder EGM Resolution Drafting
- Form SH-7 Online MCA Filing within 30 Days
Equity Ceiling
Why increasing authorized capital is the prerequisite for fresh investment
A company's Authorized Share Capital represents the maximum statutory amount of share capital it is legally empowered to issue to shareholders, as defined in Clause V of its Memorandum of Association (MOA).
A company cannot issue new shares or accept equity funding that exceeds its current authorized capital. When a startup prepares for a funding round, employee stock option pool (ESOP) expansion, or bonus share issue, its authorized capital must first be formally increased.
Increasing authorized capital requires convening an Extraordinary General Meeting (EGM), passing an ordinary resolution, amending the MOA, paying differential state stamp duty, and filing Form SH-7 with the Registrar of Companies within 30 days.
Triggers
When must a company increase its authorized capital?
Equity Fundraising / Angel Rounds
Creating head-room to issue new shares to angel investors, venture capitalists, or private equity partners.
Founder Capital Infusion
Founders seeking to pump personal savings into the business in exchange for newly issued equity shares.
ESOP Pool Creation
Allocating authorized capital to back employee stock option schemes without diluting existing share counts.
Bonus Share Issuance
Capitalizing company reserves by issuing free bonus shares to existing shareholders beyond the current capital cap.
Scope
Complete capital increase secretarial services
AOA Authorization Review
Verifying that the company's Articles of Association authorize capital increases under Section 61.
Differential Stamp Duty Calculation
Calculating precise state stamp duty payable on the capital increase based on the state of registration.
EGM Notice & Resolution Kit
Drafting board meeting resolutions, 21-day EGM notices (or shorter consent waivers), and explanatory statements.
Amended MOA Capital Clause V
Re-drafting Clause V of the Memorandum of Association reflecting the expanded share capital.
Form SH-7 Preparation & Filing
Digital filing with the MCA V3 portal accompanied by certified resolutions and altered MOA.
Approval & Master Data Update
Tracking until the ROC updates the company's authorized capital on the public MCA master data portal.
Workflow
Increasing authorized capital in 3 steps
Simple, organized, and guided at every step by our compliance desk.
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1
Step 1 — Capital Structure Planning
Determine target capital ceiling and calculate differential state stamp duty and MCA registration fees.
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Step 2 — Board Meeting & EGM Approval
Hold board meeting to recommend the increase. Shareholders approve the alteration in an EGM.
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3
Step 3 — Form SH-7 Filing & Approval
Submit Form SH-7 on the MCA portal within 30 days. The ROC approves the filing and updates public master data.
Checklist
Documents required to increase authorized capital
- Copy of original Memorandum of Association (MOA) and Articles of Association (AOA)
- Audited balance sheet showing existing capital structure
- Notice of EGM along with Explanatory Statement under Section 102
- Certified true copy of Ordinary Resolution passed at the EGM
- Altered copy of the Memorandum of Association (amended Clause V)
- Class-3 Digital Signature Certificate (DSC) of an active director
Capital Distinctions
Authorized capital vs. paid-up capital
Authorized Share Capital
The maximum threshold of equity capital a company can legally issue according to its MOA Clause V. Set by government filing.
Paid-Up Share Capital
The actual amount of capital invested by shareholders into the company's bank account against issued share certificates.
Why VIDURA
Precision execution for corporate capital changes
State Stamp Duty Expertise
Accurate computation across varying state stamp laws (e.g., Rajasthan, Maharashtra, Delhi) to prevent underpayment notices.
Short Notice EGM Documentation
We structure 95% shorter consent documentation for rapid capital increases needed during urgent funding rounds.
30-Day Guarantee
Form SH-7 filed well ahead of statutory cutoff dates, preventing compounding late filing penalties.
FAQ
Frequently Asked Questions About Increasing Capital
What is the difference between authorized capital and paid-up capital?
Authorized capital is the maximum limit of share capital a company is permitted to issue under its MOA. Paid-up capital is the actual amount of capital that has been subscribed and paid for by shareholders. Paid-up capital can never exceed authorized capital.
How much stamp duty is payable on increasing authorized capital?
Stamp duty varies significantly by state. For example, in Delhi, it is a fixed percentage, while in Maharashtra and Rajasthan, it follows slab-based rates. Our team calculates the exact differential stamp duty payable based on your state of registration.
What is the deadline for filing Form SH-7?
Under Section 64(1) of the Companies Act, Form SH-7 must be filed with the Registrar of Companies within 30 days from the date of passing the resolution increasing the capital.
Scale Your Capacity
Expand your company's authorized capital ceiling today.
Connect with VIDURA's secretarial desk. We handle EGM resolutions, MOA amendments, and Form SH-7 filing.