Change in Authorized Capital
- Art Teacher
- London, UK
- 5-7 Hrs
As companies grow and require additional funds, increasing the Authorized Share Capital becomes a crucial step, since it defines the maximum value of shares a company can issue as per its Memorandum of Association (MOA). Under the Companies Act, 2013, this process is carried out by filing Form SH-7 with the Registrar of Companies (ROC) after obtaining approval from the Board and shareholders through a resolution. For example, if a company incorporated with ₹10 lakh authorized capital seeks to raise more investment, it must first amend its MOA and file Form SH-7 before issuing new shares. This ensures legal compliance, transparency, and readiness to attract fresh investments while safeguarding the interests of shareholders and stakeholders.
- Certified true copy of the Board Resolution approving the increase in authorized capital.
- Certified true copy of the Shareholders’ (Ordinary) Resolution passed in the General Meeting.
- Altered Memorandum of Association (MOA) reflecting the new capital clause.
- Altered Articles of Association (AOA) (if amended).
- Notice of Extra-Ordinary General Meeting (EGM) with Explanatory Statement.
- Digital Signature Certificate (DSC) of an authorized director.
- Check AOA
- Board Meeting
- Shareholders’ Approval
- Alter MOA (and AOA, if required)
- File Form SH-7
- Pay the prescribed ROC fees
- ROC Approval
Yes, increasing authorized capital is mandatory if the company’s current authorized capital is insufficient to accommodate the new share issue; shares cannot be issued beyond the authorized limit.
Form SH-7 must be filed with the Registrar of Companies within 30 days of passing the resolution to increase authorized share capital.
Form SH-7 cannot be filed without shareholder approval; an ordinary resolution by shareholders is required for increasing authorized capital.
A company with annual filing defaults or pending financial statements cannot change its name until all filings and repayments are completed.
Form SH-7 can also be filed for decreasing authorized capital, subject to proper procedures and shareholder approval.
Yes, holding an Extraordinary General Meeting (EGM) and passing the relevant resolution is mandatory before filing SH-7 for authorized capital changes.