Change in Authorised Capital

Change in Authorised Capital

What Is The Need To Increase Authorised Share Capital ?

Sometimes, the amount of capital required by the company for expansion might surpass the limit of the authorised capital registered with the MCA at the time of incorporation of company. The authorised capital is the maximum amount of capital for which the Company can issue shares to the shareholders.

As per Section 2(8) of the Companies Act, 2013, the Authorised Capital limit is specified in the Memorandum of Association under the Capital Clause. A company may take the necessary steps required to increase the authorised capital limit in order to issue more shares, but it cannot issue shares exceeding the authorised capital limit in any case.

Steps To Be Followed For Change In Authorised Capital

• Article of Association- Articles of Association must be verified to check whether a provision exists that allows for a change in the authorised capital of the company, If the provision exists, then the process becomes simplified. However, if the provision does not exist, then the Articles of Association must be amended first as set out under Section 14 of the Companies Act, 2013 and then only can the company proceed with the alteration of authorised capital.
• Conduct Board Meeting- Directors should approve the proposal for alteration of Authorised Share Capital in a Board Meeting.
• Extra-Ordinary General Meeting (EGM)- Hold EGM and seek approval of Shareholders,Director and Auditor for alteration of authorised capital. Once the approval has been obtained, and the ordinary resolution is passed, the explanatory statement to the same is attached, and the increase in the Authorised Capital is made.

With in 30 days of the resolution being passed, a company must file E-Form SH-7 and E-Form MGT – 14 (if applicable) along with the prescribed fees with the Registrar.

 Form MGT – 14: This form has to be filed with the RoC first within 30 days of passing the respective resolution. The form is to be filed on the MCA portal, with the following details:

• Details of the company, including its CIN.
• Purpose concerning which the form is being filed.
• Date of dispatch of the notice.
• Date of passing the resolution.
• Details regarding the resolution.
• Digital Signatures and DINs wherever necessary.

The following attachments are to be provided:

• Notice of the EGM along with the Explanatory Statement as per Section 102.
• Certified copy of the resolution passed in the EGM.
• Copy of the new MOA (change made in the Capital Clause).
• Copy of the new AOA (provision for the increase in authorised share capital).

 Form SH – 7: This form has to be filed with the RoC within 30 days of passing the respective resolution. The objective of this form is to intimate the Registrar regarding the details of the increase in the authorised capital. The form is be filed on the MCA portal, with the following details:

• Details of the company, including its CIN.
• Type of resolution.
• Date of the meeting.
• Service Request Number (SRN) of Form MGT – 14 already filed.
• Details regarding amount of original authorised share capital and amount of new authorised share capital.
• Details regarding the breakup of the additional share capital.
• Particulars regarding the Stamp Duty Fees paid.
• Digital Signatures and DINs wherever necessary.

The following attachments are to be provided:

• A certified true copy of the resolution for the alteration of capital.
• Copy of the new MOA (change made in the Capital Clause).
• Copy of the new AOA (in case of alteration to include provision for the increase in authorised share capital).
• Any other optional attachment, if any. The forms must be submitted within the time period stipulated in order to avoid any penalties or subsequent punishment wherein the company as well its officers will be held liable.

Increase in Authorised Share Capital — Current Compliance Approach

When authorised share capital needs to be increased, the company must follow the applicable corporate approval, constitutional-document and MCA filing requirements.

How we handle it

1. Review existing authorised and paid-up capital and the company’s constitutional documents.
2. Identify the required approvals and alteration of the memorandum where applicable.
3. Prepare resolutions and supporting documentation.
4. Prepare and submit the applicable MCA filing and attachments.
5. Review the updated statutory record and maintain the supporting documents.

2026 compliance note

Requirements, forms, fees and filing procedures can change through MCA notifications, circulars and portal updates. We verify the applicable route and current portal requirements for the relevant facts and period before filing.

What you should keep ready

• Entity master data
• Director/partner details where applicable
• DSC/DIN/LLPIN/CIN information where applicable
• Corporate approvals and supporting documents
• Registered-office, financial or agreement records where relevant