Change in Share Capital
Enhance investor confidence by maintaining adequate capital as your company grows. Updating or increasing your share capital ensures the business has sufficient financial strength and supports future expansion and investment opportunities.
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Step-by-Step Change in Share capital Process
From document collection to final approval — every step made simple and transparent.
Board Meeting Notice
Issue a notice under Section 173(3) of the Companies Act, 2013 to convene a Board Meeting for discussing the proposal to increase the authorised share capital.
Board Resolution
Conduct the Board Meeting and pass a resolution granting in-principle approval to increase the authorised share capital.
Calling the EGM
Issue notice for an Extraordinary General Meeting (EGM) to seek shareholders’ approval for amending the authorised share capital clause in the Memorandum of Association (MOA).
Ordinary Resolution
At the EGM, pass the required Ordinary Resolution under Section 61(1)(a) of the Companies Act, 2013 to approve the increase in authorised share capital.
Form SH-7 Filing
File Form SH-7 with the Registrar of Companies (ROC) within 30 days of passing the Ordinary Resolution, along with the prescribed fees and required attachments as per Section 64.
ROC Approval
Once the ROC approves Form SH-7, the company’s authorised share capital will officially stand increased.
A company must increase its authorised share capital before issuing any additional equity shares or raising its paid-up capital. Since the paid-up capital can never exceed the authorised capital, a company planning to bring in new investment, allot shares, or expand its ownership must first ensure that its authorised capital is sufficient. If it is not, the authorised share capital must be increased to accommodate the proposed increase in paid-up capital.
What is the procedure to increase the authorised share capital of a company?
Increasing the authorised share capital can be done at any time, provided the company follows the requirements of Section 61 (read with Sections 13 and 14) of the Companies Act, 2013. The process involves the following steps:
1. Check Articles of Association (AOA)
Before increasing the authorised capital, the company must ensure that the Articles of Association permit such an increase. If the AOA does not allow it, the Articles must be amended by passing a special resolution as per Section 14 of the Companies Act, 2013.
2. Hold a Board Meeting
A Board Meeting is convened to approve the proposal and to call an Extraordinary General Meeting (EGM) for shareholders to vote on the increase in authorised share capital.
3. Conduct the EGM
On the scheduled date, the EGM is held, and an Ordinary Resolution is passed under Section 61(1)(a) to approve the increase in authorised share capital.
4. File Form SH-7
After the resolution is passed, the company must file Form SH-7 with the Registrar of Companies (ROC) within 30 days, along with the prescribed documents and fees.
What happens if a company does not file the form for increasing authorised share capital?
If a company fails to file the required resolution or agreement for the increase in authorised share capital within the prescribed time (including the extended period allowed under Section 403), it will face penalties under Section 117(2) of the Companies Act, 2013.
The consequences are:
Therefore, timely filing of the form is crucial to avoid heavy penalties.
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