Section 62 · Companies Act, 2013 · Form SH-7
ऑथराइज़्ड कैपिटल बढ़ाना
ऑथराइज़्ड कैपिटल बढ़ाने से कंपनी नए निवेशकों, कर्मचारियों (ESOP) या मौजूदा शेयरहोल्डरों को ज़्यादा शेयर जारी कर सकती है। हम बोर्ड रेज़ोल्यूशन से लेकर ROC की पुष्टि तक पूरा काम करते हैं।
- ROC Approval
- 20-30 days
- Companies Act 2013
- Section 62/63
- ROC Filing
- Form SH-7
- हमारी फ़ीस
- From ₹4,999 + GST
- Form SH-7 filed by practicing CA
- Special resolution drafted and filed
- MoA amendment + ROC confirmation
Increase Authorized Capital
Share your company details and our CA will call you back to walk you through the capital increase process.
मुख्य तथ्य
ज़रूरी तथ्य, एक ही जगह
जो जानकारी आम तौर पर पाँच अलग-अलग पेजों से जोड़नी पड़ती है, वह सब एक ही जगह।
- Governing sections
- Section 62 & 63, Companies Act, 2013
- Increase of authorized capital
- Forms used
- Form SH-7 + MGT-14
- ROC filing for capital increase
- Shareholder approval
- Special resolution (75% majority)
- Mandatory for capital increase
- Right of pre-emption
- Section 62(1) - existing shareholders first
- Unless special resolution waives it
- MoA amendment
- Clause V (capital clause) amended
- Authorized share capital increased
- Fresh issue
- Form PAS-3 for subsequent share issuance
- Actual shares issued after increase
- Processing time
- 20-30 working days
- ROC confirmation
- Our fee from
- ₹4,999
- End-to-end capital increase
What is increasing authorized capital?
Authorized capital is the maximum amount of share capital that a company is authorized to issue, as specified in Clause V of its MoA. When a company wants to issue new shares - to raise fresh investment, issue ESOPs, or expand operations - it must first ensure that the authorized capital ceiling allows it. If the current authorized capital is insufficient, the company must increase it before issuing new shares.
Increasing authorized capital is governed by Section 62 (further issue of capital) and Section 63 (increase of authorized capital) of the Companies Act, 2013. The process requires: (a) a special resolution passed by shareholders holding at least 75% of voting rights, (b) filing Form SH-7 with the ROC for confirmation of the increase, (c) filing Form MGT-14 within 30 days of the special resolution, and (d) amending Clause V of the MoA to reflect the new authorized capital.
Section 62(1) gives existing shareholders the pre-emptive right to subscribe to the new shares in proportion to their existing holding. However, a special resolution can waive this right, allowing the company to issue shares to new investors without offering them first to existing shareholders. This is commonly done for fundraising rounds where new investors are brought in.
At Bizeneed, our CA team handles the complete process: we verify the proposed new capital amount, draft the special resolution (including any waiver of pre-emptive rights), prepare explanatory statements, file Form SH-7 and MGT-14 with the ROC, and amend the MoA's capital clause. We also coordinate with the company's advisors to ensure the capital increase aligns with the overall funding strategy.
Methods of increasing capital
There are several ways to increase a company's share capital, each with different legal requirements.
Rights Issue (Section 62(1))
Existing shareholders in proportion
Preferential Allotment (Section 62(3))
Selected investors (new or existing)
| पहलू | Rights Issue (Section 62(1)) | Preferential Allotment (Section 62(3)) |
|---|---|---|
| Who gets the shares | Existing shareholders in proportion | Selected investors (new or existing) |
| Pre-emptive right | Mandatory unless special resolution waives it | Waiver of pre-emptive right required |
| Notice period | Minimum 21 days' notice to shareholders | Special resolution for waiver |
| Pricing | Usually at market or par value | Can be at premium (common for investors) |
| Valuation | Board-determined (fair value) | Requires valuation report (SEBI/ICAI norms) |
| Typical use | Pro-rata capital increase to all shareholders | Fundraising from new investors, ESOP issuance |
| Form required | Form PAS-3 (return of allotment) | Form PAS-3 + Section 64/67 disclosures |
| Compliance | Simpler - standard procedure | More elaborate - valuation, disclosures, approvals |
Bizeneed विज़ुअल गाइड
ऑथराइज़्ड कैपिटल बढ़ाना
Increase your company's authorized capital under Section 62/63 of the Companies Act, 2013. File Form SH-7 with ROC for capital increase. Attract investors, issue more shares, and scale operations. From ₹4,999.
- 1ज़रूरत समझना
- 2दस्तावेज़ तैयार करना
- 3फ़ाइलिंग पूरी करना
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पात्रता
Who needs to increase authorized capital?
Increasing authorized capital is necessary whenever a company needs to issue more shares than its current authorized limit allows.
- Company is raising a funding round - needs more shares to issue to investors
- ESOP pool needs to be created or expanded - requires additional authorized shares
- Current authorized capital is nearly exhausted - need headroom for future issuances
- Company wants to issue bonus shares (Section 63) to reward shareholders
- Business expansion requires fresh equity investment from new partners
- Debt-to-equity conversion - lenders converting debt to equity requires additional shares
- Strategic investor onboarding - institutional investor requires a large share allocation
- Company was incorporated with a low authorized capital and needs to scale
- Preparing for IPO - SEBI requires minimum net worth and capital structure
- Family business restructuring - next-generation inducted via share issuance
एंटिटी के प्रकार के अनुसार
| एंटिटी | लागू क़ानून | पात्र |
|---|---|---|
| Private Limited Company | Companies Act, 2013, Section 62/63 | हाँ |
| Public Limited Company | Companies Act, 2013, Section 62/63 | हाँ |
| One Person Company (OPC) | Companies Act, 2013, Section 62/63 | हाँ |
| Section 8 Company | Companies Act, 2013, Section 62 (with prior CG approval) | हाँ |
| Producer Company | Companies Act, 2013, Section 62/63 | हाँ |
| Unlimited Company | Companies Act, 2013, Section 62/63 | हाँ |
| LLP | Not applicable - contribution flexible | नहीं |
Common capital increase scenarios
Startups
- Pre-Series A: increase authorized capital to accommodate VC investment
- Create ESOP pool (5-15% of post-money shares)
- Series A/B/C rounds require capital increase at each stage
SMEs going public
- Pre-IPO capital increase to meet SEBI requirements
- Bonus issue to existing shareholders before IPO
- Institutional placement of shares via QIP
Family businesses
- Gift shares to next generation - increase capital first
- Bring in a strategic investor - increase for preferential allotment
- Convert loans to equity (debt-to-equity swap)
Manufacturing companies
- Capacity expansion funded via fresh equity
- Debt-to-equity restructuring after high leverage
- Greenfield project funded via rights issue to existing shareholders
कौन पात्र नहीं है
- LLPs increase partner contribution via LLP agreement amendment, not capital increase
- Partnership firms increase capital via partnership deed amendment
- Proprietorships have no concept of authorized capital
दस्तावेज़
Documents required for increase of authorized capital
8 ज़रूरी
चेकलिस्ट मुझे ईमेल करेंसभी एंटिटी के लिए एक जैसे
- Special resolution passed by shareholders (75% majority)ज़रूरी
- Notice of EGM with explanatory statementज़रूरी
- Current MoA (Clause V - capital clause)ज़रूरी
- Current AoAज़रूरी
- Latest audited balance sheet and P&Lज़रूरी
- DSC of an authorized directorज़रूरी
- PAN of the companyज़रूरी
- Current CoIज़रूरी
एंटिटी के हिसाब से
| एंटिटी | अतिरिक्त दस्तावेज़ |
|---|---|
| Private Limited Company (Section 62 rights issue) | Special resolution, MGT-14, explanatory statement, audited balance sheet, MoA, AoA, DSC, PAN, CoI, Form SH-7, rights issue notice |
| Private Limited Company (Section 63 preferential allotment) | Special resolution waiving pre-emptive rights, valuation report, explanatory statement, MoA, AoA, MGT-14, Form SH-7, Form PAS-3 |
| Public Limited Company | Same as Pvt Ltd + stock exchange intimation (if listed), SEBI disclosure requirements, merchant banker certificate |
| Section 8 Company | Special resolution + prior Central Government approval, Form SH-7 with CG NOC |
| Bonus issue (Section 63) | Special resolution, audited balance sheet showing free reserves, Form SH-7, MoA amendment if needed |
Get the capital increase checklist
A one-page checklist showing exactly what you need for Form SH-7 filing.
प्रक्रिया
How increase of authorized capital works
The capital increase process requires shareholder approval, ROC confirmation, and MoA amendment - then new shares can be issued.
Board resolution and EGM notice
The board passes a resolution to convene an EGM for approving the capital increase. We draft the board resolution, EGM notice, and explanatory statement. For preferential allotment (Section 62(3)), the explanatory statement includes valuation details and the identity of the allottee.
Board of Directors
EGM and special resolution
Shareholders pass a special resolution (75% majority) approving the increase. The resolution specifies current authorized capital, proposed new authorized capital, the increase amount, and for preferential allotment, waiver of pre-emptive rights. We record minutes and voting details.
Shareholders
MGT-14 filing
We file Form MGT-14 with the ROC within 30 days of the special resolution. MGT-14 registers the resolution with the ROC and includes the resolution text, explanatory statement, and EGM notice.
Our CA
Form SH-7 filing
We prepare and file Form SH-7 with the ROC, applying for confirmation of the capital increase. The form includes the special resolution, audited balance sheet, explanatory statement, and details of the proposed increase. The ROC reviews and processes the application.
Our CA
ROC confirmation and MoA amendment
The ROC processes Form SH-7 and issues a confirmation order. With the ROC order, we amend Clause V of the MoA to reflect the new authorized capital. The amended MoA is filed with the ROC. The company's authorized capital is now increased and ready for new share issuances.
Our CA + CS
Share issuance (optional, post-increase)
Once authorized capital is increased, the company can issue new shares to investors, employees, or existing shareholders. We assist with Form PAS-3 (return of allotment), issuance of share certificates, and updating the register of members. For ESOP issuance, we also prepare the ESOP scheme and related disclosures.
Our CA
If you are increasing capital for a preferential allotment to investors, the ROC may scrutinize the valuation more carefully. We recommend obtaining an independent valuation report from a registered valuer before filing. Also, ensure all pending ROC filings (AOC-4, MGT-7) are complete before filing Form SH-7 - the ROC may hold up the application if there are outstanding defaults.
समय-सीमा
How long does authorized capital increase take?
From board resolution to ROC confirmation, the process typically takes 20-30 working days.
| चरण | समय |
|---|---|
| Board resolution + EGM notice | 3-5 days |
| EGM + special resolution (75% approval) | 5-7 days |
| MGT-14 filing (within 30 days) | 2-3 days |
| Form SH-7 preparation | 3-5 days |
| Form SH-7 filing + ROC processing | 10-15 days |
| MoA amendment + ROC order compliance | 5-7 days |
Total: 20-30 working days. For preferential allotment, add 5-7 days for valuation report preparation.
फ़ीस
What it costs
Government fees for capital increase are nominal. Our fee covers the complete process.
Basic
Authorized capital increase only
₹4,999 + GST
- Special resolution drafting
- MGT-14 filing
- Form SH-7 preparation and filing
- MoA amendment
- Email support
सबसे लोकप्रिय
Standard
Capital increase + fresh share issuance
₹7,999 + GST
- Everything in Basic
- Form PAS-3 filing
- Share certificate issuance
- ROC follow-up
- WhatsApp support
Premium
Capital increase with investor onboarding
₹12,999 + GST
- Everything in Standard
- Valuation report (preferential allotment)
- Shareholders agreement support
- Priority support (1 month)
- Post-increase compliance calendar
- Priority processing
फ़ीस का पूरा ब्योरा
| विवरण | सरकारी फ़ीस | प्रोफ़ेशनल फ़ीस |
|---|---|---|
| Form SH-7 (capital increase) | ₹500-2,000 (capital-dependent) | Included |
| Form MGT-14 (special resolution filing) | ₹1,000-2,000 | Included |
| Stamp duty on amended MoA | ₹200-1,000 (state-dependent) | Included |
| Valuation report (preferential allotment) | Nil | ₹3,000-10,000 (varies) |
| Professional fee - Basic | Nil | ₹4,999 + GST |
| Professional fee - Standard | Nil | ₹7,999 + GST |
| Professional fee - Premium | Nil | ₹12,999 + GST |
कीमतों में GST शामिल नहीं है। लागू दर से GST आपके इनवॉइस में जोड़ा जाएगा।
किसी भी प्लान में शामिल नहीं:
- Stamp duty on amended MoA (varies by state)
- Independent valuation fee for preferential allotment (included in Premium)
- Professional fees of a CA for tax advisory
- Cost of new DSC if existing one is expiring
Which plan fits your capital increase?
Answer a couple of quick questions and get a plan recommendation.
फ़ायदे
Why increase your company's authorized capital
Fundraising readiness
- Issue fresh equity shares to investors - VCs, angels, and institutional investors
- Increase authorized capital before a funding round to avoid delays
- Create an ESOP pool for employee retention and recruitment
Shareholder flexibility
- Rights issue to existing shareholders - give them first dibs on new shares
- Bonus issue (Section 63) - reward shareholders without cash outlay
- Preferential allotment - bring in strategic investors on favorable terms
Business scaling
- Fund expansion plans, new offices, or acquisitions via fresh equity
- Consolidate balance sheet - reduce debt-to-equity ratio
- Strengthen net worth for tenders and government contracts
Strategic positioning
- Increase capital before an IPO or listing to meet SEBI requirements
- Create a larger authorized capital base for future funding rounds
- Signal growth ambitions to investors and stakeholders
अक्सर होने वाली गलतियाँ
Common mistakes during authorized capital increase
Increasing capital during an active fundraising round
Increase authorized capital before starting fundraising negotiations. Doing it mid-round causes delays. We recommend doing it at least 30 days before investor discussions.
Not offering pre-emptive rights properly
Under Section 62(1), existing shareholders must be offered new shares first. If you want to issue shares to new investors instead, you need a special resolution waiving pre-emptive rights. We ensure the correct procedure.
Forgetting MGT-14 within 30 days
MGT-14 must be filed within 30 days of the special resolution. Late filing attracts penalties. We track the deadline and file promptly.
New authorized capital set too low
Plan ahead - set the new authorized capital with room for 1-2 more rounds of funding. Repeating the process every few months is inefficient.
Not getting valuation done for preferential allotment
For preferential allotment to investors, a valuation report from a registered valuer is mandatory. We coordinate with registered valuers for compliant valuations.
Confusing authorized capital increase with share issuance
Increasing authorized capital (Form SH-7) is only the first step. You still need to issue new shares via Form PAS-3. Both steps are separate and both required. We handle both.
ऊपर बताई गई हर गलती का हल है - और ज़्यादातर गलतियाँ पहली बार में ही सही जानकारी देकर टाली जा सकती हैं। बाद में सुधारने से आसान है कि पहली बार में ही सही किया जाए।
अगर कुछ पहले ही गलत हो चुका है, या आप पक्का करना चाहते हैं कि ऐसा न हो, तो नीचे दी गई 15 मिनट की कॉल सबसे तेज़ रास्ता है।
Bizeneed क्यों
Why choose Bizeneed for capital increase
- CA-led team with deep expertise in Section 62/63 compliance and ROC procedures
- Complete service: special resolution, MGT-14, Form SH-7, MoA amendment, and post-increase share issuance
- Pre-emptive rights handled correctly - we draft the waiver resolution when needed
- Valuation report coordination for preferential allotments
- No ROC rejections - filings prepared with precision
- Priority support for smooth communication throughout
सवाल-जवाब
अक्सर पूछे जाने वाले सवाल
The process involves: (1) Board resolution convening an EGM, (2) EGM notice with explanatory statement sent to shareholders, (3) Special resolution (75% majority) approving the increase, (4) Filing Form MGT-14 with ROC within 30 days, (5) Filing Form SH-7 with ROC for confirmation, (6) ROC issues confirmation order, (7) Amending Clause V of the MoA, and (8) Issuing new shares via Form PAS-3. The entire process takes 20-30 working days.
Authorized capital is the maximum amount of share capital a company can issue (set in MoA Clause V). Issued capital is the actual amount of shares that have been issued to shareholders. A company can issue shares up to its authorized limit. For example, a company with ₹10 lakh authorized capital and ₹2 lakh issued capital can still issue ₹8 lakh worth of new shares without increasing authorized capital.
Section 62 deals with 'Further issue of share capital' - the actual issuance of new shares. It covers: (1) Rights issue to existing shareholders (Section 62(1)), (2) Employee stock options/benefits (Section 62(1)(b)), (3) Preferential allotment to selected investors (Section 62(3)). Existing shareholders have pre-emptive rights unless waived by special resolution.
Section 63 deals with the 'Issue of bonus shares' - converting free reserves or securities premium into share capital. Bonus shares increase issued capital without bringing in fresh money, reward shareholders proportionally, and require a special resolution. They are issued in a specific ratio (e.g., 1:1 bonus means 1 new share for every 1 held).
Section 62 is for issuing new shares for fresh capital - new money comes into the company. It requires Form SH-7 (if authorized capital needs increase) + Form PAS-3. Section 63 is for issuing bonus shares from existing reserves - no new money comes in, but share capital increases. Both require Form SH-7 + Form PAS-3.
Form SH-7 is the application for confirmation of increase in authorized share capital, filed with the ROC under Section 63 of the Companies Act, 2013. It must be filed within 15 days of passing the special resolution and includes the special resolution, explanatory statement, audited balance sheet, and details of the proposed increase. The ROC processes it and issues a confirmation order.
Yes. Under Section 63(2) read with Section 62, a company can increase authorized capital only by passing a special resolution in a general meeting. A special resolution requires approval from shareholders holding at least 75% of voting rights. For preferential allotment, the resolution must also waive pre-emptive rights.
Under Section 62(1), existing shareholders have the right to subscribe to new shares in proportion to their existing holding before shares are offered to anyone else. This right can be waived by passing a special resolution. Companies typically waive it when bringing in new investors or issuing ESOPs to employees.
Government fee for Form SH-7 depends on the increase in authorized capital: up to ₹1 lakh: ₹200. ₹1 lakh to ₹10 lakh: ₹400. ₹10 lakh to ₹1 crore: ₹600. ₹1 crore to ₹10 crore: ₹1,200. Over ₹10 crore: ₹2,400. Fees are subject to MCA notifications.
Yes. You can increase authorized capital by amending the MoA (via Form SH-7) without actually issuing new shares. The increased authorized capital becomes available for future issuances. Many companies increase authorized capital proactively to create a buffer for future funding rounds without needing another ROC filing.
Increasing authorized capital does not change the shareholding pattern - it only raises the ceiling for future issuances. The shareholding pattern changes only when new shares are actually issued (via Form PAS-3). Once new shares are issued, the pattern is updated in the next MGT-7 filing.
After authorized capital is increased and ROC confirmation is received, issuing new shares via Form PAS-3 takes 5-10 working days. The entire process (capital increase + share issuance) takes 25-35 working days. We handle both steps as part of our Standard and Premium plans.
A valuation report is not required for a simple increase in authorized capital (Section 63). However, for preferential allotment under Section 62(3) - issuing shares to selected investors at a premium - a valuation report from a registered valuer is mandatory under Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014.
Yes, there is no limit. Each increase requires a fresh special resolution, MGT-14 filing, and Form SH-7. Many startups increase authorized capital at each funding stage. We recommend increasing in larger increments to minimize the number of filings.
Increasing authorized capital requires amending the MoA, which may attract stamp duty depending on the state. Maharashtra: ₹200-1,000. Karnataka: ₹1,000 for every ₹1 lakh increase. Some states charge a percentage of the increase. We calculate the exact stamp duty based on your state.
लेखक: Bizeneed Research Team, Service information
आख़िरी अपडेट: 6 September 2026
स्रोत
Filing procedures, fee amounts, and statutory references on this page are verified against the sources above. Rules and fees can change with MCA notifications - confirm with our team or your CA before filing.
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