Authorized Capital is the maximum amount of share capital that a company is authorized to issue to shareholders as per its Memorandum of Association (MoA). Increasing authorized capital means raising this limit to issue more shares.
To raise additional funds by issuing more shares
To accommodate new investors or shareholders
To support business expansion or diversification
| Step | Description |
|---|---|
| 1. Board Meeting | Hold a board meeting to propose increase in authorized capital |
| 2. Shareholders’ Approval | Pass a Special Resolution in a General Meeting approving the increase |
| 3. Alter Memorandum of Association (MoA) | Amend the MoA clause specifying authorized capital with new amount |
| 4. File Forms with MCA |
Form MGT-7: Annual return (if applicable)
Form SH-7: File with MCA for increase in authorized capital within 30 days of resolution
| 5. Pay Fees and Stamp Duty | Pay prescribed government fees and stamp duty on increased capital |
Board Resolution
Special Resolution passed in General Meeting
Altered MoA (with new authorized capital clause)
Proof of payment of fees
Form SH-7 for filing with MCA
File Form SH-7 within 30 days of passing the Special Resolution
Registrar updates the records and issues confirmation
Increase must comply with Companies Act, 2013 provisions
Authorized capital can be increased in multiples of ₹1,00,000 or as per the company's requirement
Once increased, the company can issue shares up to the new limit
