Increase Share Capital in India
Fuel your company's growth by increasing its share capital. We handle the MOA/AOA amendments, board resolutions, and ROC filings for a seamless capital infusion.
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INCREASE SHARE CAPITAL - AN OVERVIEW
Share capital represents the total value of shares a company issues to its shareholders. As a company expands, it often needs to raise additional funds by issuing new shares. This process is known as Increasing Share Capital.
The process is governed by the Companies Act, 2013 and involves two main steps if the current limit is reached: increasing the Authorized Share Capital (the maximum limit) and then allotting the Paid-up Share Capital (actual shares issued).
At Taxcom Technologies, we assist companies in navigating the legal complexities of capital expansion. We ensure that all resolutions are passed correctly, MOA/AOA are amended, and forms like SH-7 and PAS-3 are filed with the ROC within the statutory timelines.
Authorized Capital
The maximum amount of capital for which shares can be issued by a company. Increasing this requires amending the MOA.
Paid-up Capital
The actual amount of money received by the company against the shares issued. This is increased through allotment.
Requirements for Capital Increase
Documents Needed:
- • Latest Memorandum of Association (MOA)
- • Latest Articles of Association (AOA)
- • Notice of Board Meeting & EGM
- • Certified copy of Board Resolution
- • Certified copy of Ordinary Resolution (EGM)
- • Altered MOA (showing new capital)
Information Required:
- • Amount of proposed increase
- • Class of shares (Equity/Preference)
- • Face value of shares
- • Details of allottees (for Paid-up increase)
- • Date of passing resolutions
Process to Increase Share Capital
Check AOA Provisions
Verify if the Articles of Association allow an increase in share capital. If not, amend the AOA first.
Board Meeting
Convene a board meeting to approve the increase and fix the date, time, and venue for the EGM.
Extraordinary General Meeting (EGM)
Pass an Ordinary Resolution at the EGM to authorize the increase in capital and amend the MOA.
Filing Form SH-7
File Form SH-7 with the ROC within 30 days of passing the resolution, along with the altered MOA and resolution copy.
Allotment of Shares
Once authorized capital is increased, the board can allot shares and file Form PAS-3 (Return of Allotment) within 30 days.
Issue Share Certificates
Issue share certificates to the allottees within 2 months of allotment and pay applicable stamp duty.
AI Capital Readiness Check
Verify your company's readiness for capital increase
Stamp Duty on Share Capital in Various States
Increasing authorized share capital involves the payment of stamp duty to the respective state government. The rates vary significantly across India:
Maharashtra
- 0.5% of the value of shares
- Maximum limit of ₹50 Lakhs
- Payment via e-SBTR or GRAS
Delhi
- 0.15% of the value of shares
- No upper limit
- Payment via e-Stamp
Karnataka
- 0.5% of the value of shares
- Minimum ₹500
- Payment via K2 portal
Tamil Nadu
- 0.5% of the value of shares
- Calculated on authorized capital
- Payment via e-payment
Gujarat
- 0.5% of the value of shares
- Maximum limit of ₹25 Lakhs
- Payment via Cyber Treasury
West Bengal
- 0.5% of the value of shares
- Minimum ₹100
- Payment via GRIPS
Stamp Duty Calculation Note
Stamp duty is a state subject. The rates mentioned above are indicative and subject to change by state notifications. Always verify the latest rates before making payments.
Consequences of Delay
Late Filing Penalties (SH-7)
Delay in filing Form SH-7 attracts additional fees. For a delay of up to 30 days, the fee is 2x. For more than 180 days, it can go up to 12x of the normal fee.
Invalid Allotment
If shares are allotted without increasing the authorized capital first, the allotment is considered void and the company may face legal action from shareholders and the ROC.
FAQs on Share Capital Increase
What is the difference between Authorized and Paid-up Capital?
Is it mandatory to increase Authorized Capital before issuing new shares?
What is the time limit for filing Form SH-7?
What is Form PAS-3 used for?
Do I need to pay stamp duty for increasing share capital?
Why Choose Us?
Accurate Calculations
Precise calculation of stamp duty and ROC fees for your state.
Legal Drafting
Expert drafting of EGM notices, resolutions, and altered MOA/AOA.
Timely Filings
We ensure SH-7 and PAS-3 are filed within 30 days to avoid penalties.
End-to-End Support
From board approval to the issuance of share certificates.
Ready to Infuse More Capital?
Get expert assistance for increasing your company's share capital and stay compliant with ROC regulations.