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Capital structure

Increase Authorised Capital - SH-7 Filing Process

An authorised capital increase creates room for future share issuance, option grants, or fundraising, and SH-7 is the form that tells the ROC the cap table ceiling has changed.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from INR 4,900Typical timelineAuthorised capital increase filing

Authorised capital is not the same thing as paid-up capital. If the company needs more room to issue shares for fundraising, ESOP allocation, or internal restructuring, the authorised capital ceiling has to move first. We prepare the SH-7 filing sequence, review the resolution path, and calculate the fee based on the new capital band so the filing can be submitted without a last-minute reconciliation problem.

What is included
  • • Resolution path review
  • • SH-7 filing preparation
  • • Capital band fee calculation
  • • MOA alteration support where needed
  • • Post-filing data update checklist
  • • ROC follow-up if the filing is queried
Documents required
  • • Board and shareholder resolutions
  • • Current and proposed authorised capital details
  • • Updated MOA where required
  • • CIN and company master data
  • • Filing signatory and DSC details
  • • Any related approval documents
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Companies Act, 2013 section 61(1)(a)
  • • SH-7 notice of alteration of share capital
  • • Companies (Registration Offices and Fees) Rules, 2014 fee bands
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Reason

Check why the capital needs to change

We first confirm whether the increase is needed for fundraising, ESOP room, a conversion, or a broader restructuring so the resolution path is not overbuilt or underbuilt.

Step 2Approvals

Prepare the resolution and the SH-7 data

The filing needs the approved increase amount, the updated capital ceiling, and the supporting company approvals that authorize the change.

Step 3Fee logic

Calculate the filing fee correctly

The SH-7 fee is based on the increased authorised capital. For an increase, the rules require the difference between the fee on the new capital and the fee on the existing capital.

Step 4Post-filing

File and update the company record

Once submitted, the change should be reflected across the company records so later allotments, ESOP grants, or funding events do not hit a capital ceiling issue.

AEO summary

Increase authorised capital in India is usually done under section 61(1)(a) of the Companies Act, 2013 by passing the required resolution and filing SH-7 with the Registrar along with the appropriate fee calculated from the new authorised capital level.

Authorised capital vs paid-up capital

A lot of founders use these terms interchangeably, but they are different. Authorised capital is the ceiling the company is allowed to issue under its charter, while paid-up capital is the amount actually issued and paid for by shareholders.

If the company wants to issue more shares, it must have enough authorised capital headroom. That is why the increase is usually done before a funding close, a large ESOP grant, or a conversion event that would otherwise hit the cap.

From a process perspective, the change is about preparing the ceiling for future issuance. The company is not necessarily issuing new shares immediately; it is making room to do so later without a bottleneck.

  • • Paid-up capital cannot exceed the authorised ceiling.
  • • The cap table should be updated after the form is processed.
  • • The approval path should reflect the reason for the increase.

How section 61 and SH-7 fit together

Section 61(1)(a) allows the company to increase its share capital if the articles permit it and the required corporate approval is obtained. SH-7 is the notice to the Registrar that records the change.

The filing is not just a mechanical upload. The company has to show that the change was properly approved and that the capital details in the form match the company’s constitutional documents and board record.

Once the form is filed, the capital details should be updated everywhere the company talks about its capital structure: investor decks, internal registers, future allotment papers, and statutory records.

  • • Section 61 supplies the corporate power.
  • • SH-7 is the statutory notice.
  • • The MOA and records should be aligned after the increase.

Where companies lose time

The biggest delay is fee confusion. Founders often know that the capital is changing but do not calculate the filing fee against the new capital bands until the last moment.

The next issue is document mismatch. The approved increase, the capital stated in the form, and the charter document changes should tell the same story or the filing may be queried.

A third issue is treating the increase as a one-off event. If the company is actively raising or issuing shares, the cap table and the filing record should be reviewed as part of the same workflow, not in separate silos.

  • • Check the capital band before submission.
  • • Keep the approved amount consistent everywhere.
  • • Update the downstream company records after filing.

Government fees

Fee breakdown

ItemFeeNotes
SH-7 fee - up to INR 1,00,000INR 5,000Normal company fee band for authorised capital registration.
SH-7 fee - INR 1,00,000 to INR 5,00,000INR 5,000 + INR 400 per INR 10,000 or partNormal company fee band continues with the incremental calculation.
SH-7 fee - higher bandsAs per MCA fee tableThe fee rises by capital band and is capped by the rules where applicable.

Timeline

Typical turnaround

Typical timeline usually means a 2 to 4 business days turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

The fee for increasing authorised capital is based on the new capital band and, for a change, the filing fee is the difference between the fee payable on the increased capital and the existing capital at the rates in force on filing date.

Free tool

SH-7 filing fee estimator

Estimate the MCA fee payable on an authorised capital increase (incremental basis).

Incremental fee = fee on new capital − fee on current. Section 64, Companies Act 2013. Stamp duty on MOA alteration is additional and varies by state.

ROC penalty calculator

Related services

Keep the company moving

FDI compliance

Use the extra capital room before or after a foreign investment round.

Annual compliance package

Keep capital records aligned with the yearly ROC filings.

Appointment of auditor

Keep the audit record updated when the capital structure changes.

Change registered office

Bundle the capital update with a broader company record change if needed.

FAQ

Frequently asked questions

Which section of the Companies Act, 2013 authorises an increase in authorised share capital?
Section 61(1)(a) of the Companies Act, 2013 permits a company to increase its authorised share capital by altering the capital clause of its Memorandum of Association, provided the articles of association allow it. For most private limited companies an ordinary resolution of the shareholders is sufficient under section 61. The company must notify the Registrar of Companies by filing SH-7 within 30 days of the resolution under section 64(1).
Is SH-7 the only form required, or does MGT-14 also need to be filed?
SH-7 is the primary form filed with the ROC to record the alteration of share capital under section 64 of the Companies Act, 2013 and Rule 15 of the Companies (Share Capital and Debentures) Rules, 2014. MGT-14 must additionally be filed within 30 days if the articles of association require a special resolution instead of an ordinary resolution, as mandated under section 117. Most private companies with standard articles only need SH-7, but the articles should be checked before proceeding.
Within how many days must SH-7 be filed after the resolution is passed?
Section 64(1) of the Companies Act, 2013 requires the company to file SH-7 with the Registrar of Companies within 30 days of passing the resolution to alter the share capital. The 30-day window runs from the date of the shareholder resolution, not the board resolution. Filing after this deadline attracts additional fees and may trigger a notice of non-compliance from the ROC.
How is the MCA filing fee on SH-7 calculated when capital is being increased?
The fee on SH-7 for a capital increase is the difference between the fee applicable on the new higher authorised capital and the fee already paid on the existing authorised capital, calculated at the rates in the Companies (Registration Offices and Fees) Rules, 2014. The fee is computed on a sliding scale based on the total authorised capital after the increase, not just the incremental amount. Companies with a larger existing capital base therefore pay a smaller incremental fee than those starting from a low base.
Is stamp duty payable on the increased capital, and does the rate vary by state?
Yes, stamp duty is payable on the MOA alteration reflecting the increased authorised capital, and the rate varies by state because stamp duty on share capital falls under the State List of the Seventh Schedule of the Constitution. Most states levy duty on the difference between the old and new authorised capital, and e-stamping applies in states where it has been notified. The stamp duty liability should be calculated and settled before or alongside the SH-7 filing, as underpayment can delay registration of the altered capital clause.

Canonical reference: https://www.pvtltd.co/services/increase-authorised-capital

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