Strategic Overview
As a business grows, its capital requirements evolve. Increasing the Authorised Share Capital is the standard legal mechanism to enable major fund infusions for expansion, talent acquisition, and infrastructure investment.
Whether you are planning Increase in Share Capital in Delhi or anywhere in India, the process requires surgical precision in updating the Memorandum of Association (MOA). Our experts manage the entire lifecycle—from shareholder resolutions to SH-7 filings—ensuring your company remains investor-ready and compliant with Sections 61-64 of the Companies Act.
Core Objectives: Why Increase Capital?
Expansion
Fueling new products, branches, or market entry.
Investment
Opening doors for VCs, Angels, and PE partners.
Valuation
Improving creditworthiness and company ranking.
Net Worth
Strengthening the balance sheet for bank limits.
Authorised vs. Paid-Up Capital
Understanding the distinction is vital before initiating the increase. The Authorised capital is the "cap" or limit, while Paid-up capital is the actual cash in the business.
| Feature | Authorised Capital | Paid-Up Capital |
|---|---|---|
| Definition | Maximum shares a company can issue. | Actual shares issued and paid for. |
| Statutory Cap | Must be higher than paid-up capital. | Limited by the authorised amount. |
| Stamp Duty | Paid at the time of increase. | No additional duty on just receipt. |
Mandatory Documentation Checklist
Prepare these documents in high-resolution digital format before initiating the ROC filing process:
Resolutions & Minutes
- Board Resolution: Formally proposing the capital increase.
- Shareholder Resolution: Ordinary resolution passed in EGM/AGM.
- Minutes of Meeting: Formal record of the proceedings.
- Notice of GM: Proof of dispatch to all shareholders.
Charter Documents
- Altered MOA: Updated Capital Clause (Clause V).
- Altered AOA: If amendment was required for authorization.
- Form SH-7: The primary increase notification form.
Statutory Forms & Filings
Mandatory form for notifying the ROC about the increase in authorised share capital.
Required for filing the special or ordinary resolutions with the ROC (if applicable).
Filed *after* shares are actually allotted to increase the paid-up capital.
Timeline & Execution Roadmap
5 to 10 Working Days
Efficiency is driven by document readiness and ROC processing speeds.
Day 1: Formal proposal and meeting notice.
Day 2-3: EGM and Ordinary Resolution passing.
Day 4-10: Form submission and MCA approval.
Estimated Cost Breakdown
Dynamic fee based on the total capital increase amount.
Varies state-wise; Delhi follows specific defined slabs.
Includes drafting, ROC filing, and post-compliance support.
Legal Compliance Requirements
Companies Act, 2013
Strict adherence to Section 61 and Section 64 of the Act is mandatory for any capital restructuring.
Statutory Timelines
All forms must be filed within 30 days to avoid daily penalties and active non-compliant status.
Record Maintenance
Updating statutory registers (MGT-1) and issuing new share certificates (SH-1) within prescribed limits.
Portal Accuracy
Ensuring the Altered MOA is uploaded and accepted by the MCA for updated public records.
Methods of Allotment (Paid-Up Capital)
Once the authorised limit is increased, you can infusion actual funds through several routes under Sec 42 and Sec 62:
Rights Issue
Offering shares to existing shareholders in proportion to their holding.
Private Placement
Issuing shares to a selected group of persons (Investors/Angels).
Bonus Issue
Issuing free shares to existing shareholders by capitalizing profits.
Planning a Capital Infusion?
Ensure your MOA updates and SH-7 filings are legally bulletproof. Let our corporate finance experts handle your capital restructuring.
