Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
When you need to do it
You must raise the authorised capital whenever you want to issue shares beyond the existing ceiling — typically before a funding round or a bonus issue, since paid-up can never exceed authorised. If your authorised capital already has headroom, no increase is needed.
The steps
The process: the board recommends the increase and calls a general meeting; the shareholders pass an ordinary resolution altering the capital clause of the MOA; and you file Form SH-7 with the ROC within 30 days, paying the additional stamp duty and registration fees on the increased amount. Confirm the current fees, which scale with capital.
A worked example
Example: a company with ₹10 lakh authorised needs to issue ₹90 lakh of new equity to a fund. It first increases authorised capital to (say) ₹1 crore via a shareholder resolution and SH-7, paying the duty on the ₹90 lakh increase, then allots the shares and files PAS-3. Doing the increase first avoids a rejected allotment. Our team can manage the capital increase and allotment together.