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The maximum number of shares that a private corporation may issue depends on its authorised capital. The majority of start-ups start with the minimal permitted capital of Rs. 1 lakh, which is inadequate as the organization expands. The capital clause of the Memorandum of Association is updated by the board issuing a special resolution in order to issue additional shares or increase the Authorised Capital.
Authorized capital is the maximum amount of share capital that a company is authorized to issue to shareholders as per its Memorandum of Association. Increasing authorized capital allows a company to raise additional funds by issuing more shares without changing the existing shareholders' rights.
Any company looking to expand its share capital, attract investors, or raise additional funds needs to increase its authorized capital.
Increasing authorized capital provides several advantages for companies and shareholders.
The following documents are required to increase authorized capital:
The process follows a defined sequence of steps to increase authorized capital.
Call a board meeting to discuss and approve the proposal to increase authorized capital. Pass a board resolution authorizing the increase.
Send notice to all shareholders about the general meeting where the special resolution will be passed. The notice must be sent at least 21 days in advance.
Hold the general meeting and pass a special resolution approving the increase in authorized capital. Update the capital clause in the Memorandum of Association.
File Form SH-7 (notice of increase) and Form MGT-14 (resolution filing) with the Registrar of Companies within 30 days of passing the resolution.
The Registrar of Companies reviews the filing and updates the records. The increased authorized capital is now reflected in the company's records and on the MCA portal.
We manage every step, document, and filing with the ROC so you can focus on your business.
We verify your eligibility and ensure all required documents are complete and valid.
Assistance in drafting board and special resolutions for capital increase.
Guidance on notices, board resolutions, and general meeting compliance.
Complete filing of Form SH-7 and MGT-14 with the Registrar of Companies.
We respond to any queries or clarifications raised by the ROC.
Regular follow-up with ROC to ensure timely processing of your filing.
Updating the Memorandum and Articles of Association to reflect the increased capital.
Help preparing and organizing all required documents for the process.
Ensuring the increased authorized capital is reflected on the MCA portal.
Talk to a First Auditor specialist today — get a clear fee quote and document checklist before you start.
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