Quick answer
How do you increase the authorised capital of a private limited company?
An increase in authorised capital needs a board meeting, an ordinary resolution of members at a general meeting under Section 61, an altered capital clause in the memorandum, and Form SH-7 filed with the ROC within 30 days. The company pays the MCA fee difference plus state stamp duty, which is 0.15% of the increase in Delhi.
- Articles must permit the increase
- Members approve it at a general meeting
- Form SH-7 due within 30 days of the resolution
- MCA fee is the slab difference, old versus new capital
- Delhi stamp duty: 0.15% of the increase, capped at ₹25 lakh
What is an increase in authorised capital and when do you need one?
Authorised capital is the maximum share capital written in the company's memorandum. You need an increase in authorised capital whenever the paid-up capital you plan to reach is higher than that ceiling. Issued capital can never exceed authorised capital, so the increase always comes first.
Most Delhi companies start with ₹1 lakh or ₹10 lakh of authorised capital because that keeps incorporation cheap. The ceiling becomes a problem at the first serious funding event. Common triggers we see:
- An angel investor or a seed round where new shares will be allotted.
- Founders adding capital to meet a bank's margin or a tender's net worth condition.
- Converting a director's loan or a convertible note into equity.
- A bonus issue or a rights issue to existing shareholders.
- A foreign investor subscribing to shares, which later needs FC-GPR reporting to the RBI.
Authorised capital by itself is only a ceiling. Raising it does not put money in the bank or change who owns the company. That happens later through a share allotment.
Who can increase authorised capital and what must the articles say?
Section 61(1) of the Companies Act, 2013 lets a limited company having a share capital increase its authorised share capital at a general meeting, if its articles authorise it. So the first check is the articles of association, not the memorandum.
Most modern articles carry a clause allowing alteration of capital. Older companies, or companies formed with custom articles, sometimes lack it. In that case the articles are amended first by special resolution, which adds a step and a separate filing. We read both documents before drafting anything, because a missing clause is the most common reason an SH-7 plan has to be redone.
A company limited by guarantee without share capital does not file SH-7 for capital. It uses the same form to report an increase in the number of members, which follows different fee rules.
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What documents are needed for an increase in authorised capital?
You need the company's current memorandum and articles, the notice and minutes of the board and general meetings, the ordinary resolution, the altered memorandum and a valid DSC for the signing director. The SH-7 form asks for these as attachments or as data fields.
| Document | Who prepares it | Why it matters |
|---|---|---|
| Current MOA and AOA | From MCA records or the company file | Confirms the present capital clause and the power to alter it |
| Board resolution calling the general meeting | Company, drafted by us | Approves the proposal and fixes the meeting date |
| Notice of general meeting with explanatory statement | Company, drafted by us | Members must receive proper notice before voting |
| Ordinary resolution passed by members | Company | The legal approval under Section 61 |
| Altered memorandum with the new capital clause | Drafted by us | Mandatory attachment with SH-7 under Section 64 |
| MGT-14 SRN, where that filing applies | Filed by us | SH-7 checks that the MGT-14 purpose matches the capital change |
| DSC of an authorised director | Director | SH-7 is signed digitally; an expired DSC stops the filing |
Prepared by CA in Delhi from the MCA Instruction Kit for Form SH-7, checked 10 November 2026.
How do you increase authorised capital: step by step?
The process runs from a document check to the ROC accepting SH-7. A typical Delhi private limited company can complete the internal steps in a week if directors and shareholders sign promptly, and the 30-day filing clock starts on the day members pass the resolution.
- 1
Check the articles and MCA record
Confirm the articles allow the increase, the company status is active and no earlier SH-7 is pending against the CIN.
- 2
Fix the new figure
Choose an authorised capital that covers the planned allotment plus some headroom, keeping the fee slabs in mind.
- 3
Hold the board meeting
The board approves the proposal, the draft altered memorandum and the notice for the general meeting.
- 4
Hold the general meeting
Members pass the ordinary resolution. Private companies often hold it at short notice with the consent members give for that.
- 5
Pay stamp duty and file SH-7
SH-7 goes on the MCA V3 portal with the altered memorandum; the MCA fee and state stamp duty are paid online with the form.
- 6
Update the company records
Once approved, the new memorandum replaces the old one in the statutory file and the master data shows the revised capital.
What are the MCA fees for an increase in authorised capital?
The MCA fee for an increase in authorised capital is the fee on the new capital minus the fee on the existing capital, using the slab table in the Companies (Registration Offices and Fees) Rules, 2014 at the rates on the filing date. One person companies and small companies have a lower table up to ₹50 lakh.
| Nominal share capital | Normal companies | OPC and small companies |
|---|---|---|
| Up to ₹1 lakh | ₹5,000 | ₹2,000 |
| Above ₹1 lakh up to ₹5 lakh | ₹5,000 plus ₹400 per ₹10,000 | ₹2,000 |
| Above ₹5 lakh up to ₹10 lakh | ₹21,000 plus ₹300 per ₹10,000 | ₹2,000 |
| Above ₹10 lakh up to ₹50 lakh | ₹36,000 plus ₹300 per ₹10,000 | ₹2,000 plus ₹200 per ₹10,000 |
| Above ₹50 lakh up to ₹1 crore | ₹1,56,000 plus ₹100 per ₹10,000 | ₹1,56,000 plus ₹100 per ₹10,000 |
| Above ₹1 crore | ₹2,06,000 plus ₹75 per ₹10,000 | ₹2,06,000 plus ₹75 per ₹10,000 |
Source: MCA Instruction Kit for Form SH-7, fee rules section, checked 10 November 2026. The per ₹10,000 amount applies to capital above the lower limit of each slab. Fees are capped at ₹2.5 crore. If the difference works out to zero, a normal filing fee of ₹200 to ₹600 applies by capital slab.
How much is Delhi stamp duty on an increase in authorised capital?
For a Delhi company having a share capital, stamp duty on SH-7 is 0.15% of the increase (new authorised capital minus existing authorised capital), subject to a maximum of ₹25 lakh of stamp duty. Section 8 companies and companies without share capital pay nil stamp duty on SH-7 in Delhi.
Stamp duty follows the state of the registered office, so it differs across the NCR. MCA's state table shows nil SH-7 stamp duty for Haryana companies, which matters to groups with entities in Delhi and Gurugram. Our page for a CA in Gurgaon covers that side of the border.
| Case | MCA fee | Delhi stamp duty | Government total |
|---|---|---|---|
| Small company, ₹1 lakh to ₹10 lakh | Slab difference is nil, so the filing fee of ₹400 applies | ₹1,350 (0.15% of ₹9 lakh) | About ₹1,750 |
| Small company, ₹10 lakh to ₹20 lakh | ₹22,000 minus ₹2,000 = ₹20,000 | ₹1,500 (0.15% of ₹10 lakh) | About ₹21,500 |
| Public company, ₹10 lakh to ₹60 lakh (MCA's own example) | ₹1,66,000 minus ₹36,000 = ₹1,30,000 | ₹7,500 (0.15% of ₹50 lakh) | About ₹1,37,500 |
Stamp duty rate from Annexure A of the MCA SH-7 instruction kit, checked 10 November 2026. Whether a company counts as a small company depends on its paid-up capital and turnover; we confirm this before computing your figure. The MCA portal shows the final fee at the time of payment.
What happens if SH-7 is filed late?
A late SH-7 for an increase in capital attracts an additional fee of 2.5% per month for a delay of up to six months and 3% per month for the delay beyond six months, on top of the normal fee. Section 64 also provides a daily penalty on the company and officers in default.
Late filing has a practical cost too. Until SH-7 is approved, the MCA record still shows the old ceiling, so a share allotment and its return of allotment and annual filings cannot be completed against the higher figure. Investors and their lawyers check this during their review and will hold the money until it is fixed.
Rejection risks we check before filing: articles that do not permit the change, a mismatch between the resolution date and the form, a missing altered memorandum, an expired DSC, a disqualified director signing, or a pending SH-7 already on the CIN.
How does CA in Delhi handle an increase in authorised capital?
We plan the figure, draft the resolutions and altered memorandum, compute the MCA fee and Delhi stamp duty and file SH-7 from our Netaji Subhash Place office. You get a fixed written quote before work starts that shows our fee separately from the government fees.
What you send: the CIN, the new authorised capital you want, the planned allotment if any, and the DSC details of the signing director. What you get back: signed-ready board and general meeting papers, the filed SH-7 with challan, the approved form and an updated memorandum for your records.
- Moneymji lists ROC compliance and valuation, so it can handle the SH-7 and a share valuation together.
- Greenwolf Advisors handles regulatory filings and entity governance, useful for groups raising capital across India and abroad.
Compare the listed firms on our page of chartered accountant firms in Delhi, or if you prefer someone close by, see CA near me. Call or WhatsApp +91 99114 92897.
Frequently asked questions
What is the time limit to file SH-7 for an increase in authorised capital?
Thirty days. Section 64 requires the notice within 30 days of the alteration, and the MCA form counts those days from the date of the members' meeting at which the resolution was passed. After that, additional fees apply at a monthly percentage of the normal fee.
Is a special resolution needed to increase authorised capital?
No. Section 61 needs approval at a general meeting, and an ordinary resolution is enough when the articles already allow the increase. A special resolution is needed only if the articles must first be amended to give that power, which is a separate step.
Can a private company increase authorised capital without a general meeting?
No. The power under Section 61 is exercised by members in general meeting, not by the board alone. Private companies often hold that meeting at short notice with members' consent, so the meeting can follow the board meeting quickly once everyone signs.
Is MGT-14 required for an increase in authorised capital?
It depends on the company and the resolutions passed. The SH-7 form has a field for an MGT-14 SRN and checks that its purpose is the alteration of authorised capital when one is entered. We check whether your case needs MGT-14 and, if so, file it first.
How much does it cost to increase authorised capital from ₹1 lakh to ₹10 lakh?
For a small company in Delhi, the MCA slab is the same ₹2,000 at both levels, so the difference is nil and a filing fee of ₹400 applies. Delhi stamp duty is 0.15% of the ₹9 lakh increase, which is ₹1,350. Our professional fee is quoted separately and fixed in advance.
Does paid-up capital change when authorised capital increases?
No. Paid-up capital changes only when new shares are allotted and paid for. Raising the authorised figure just creates room for that allotment. Many companies increase authorised capital and allot shares in the same month, but they are two filings.
Can authorised capital be reduced later?
Section 61 also allows a company to cancel shares that have not been taken up, which reduces unissued authorised capital. Reducing issued or paid-up capital is a different, more formal process. Because fees already paid on a higher ceiling are not refunded, it pays to choose a sensible figure the first time.
Is stamp duty on authorised capital the same across Delhi NCR?
No. Stamp duty depends on the state of the registered office. MCA's table shows 0.15% of the increase for Delhi companies and nil for Haryana companies on SH-7. Companies registered in Uttar Pradesh follow that state's rule, so confirm it before budgeting.
Can I increase authorised capital and issue shares to a foreign investor together?
Yes, but in order. The ceiling is raised first through SH-7, then shares are allotted, and the inflow and allotment are reported to the RBI under FEMA. Pricing rules apply to foreign investment, so the valuation and the reporting timeline should be planned before money arrives.