Question 1

What is Authorized Share Capital and why would a company increase it?

Accepted Answer

Authorized Share Capital is the maximum amount of equity capital a company is legally authorized to issue to shareholders under its Memorandum of Association (MOA). A company must increase its authorized capital before raising new investment, bringing in new co-founders, issuing bonus shares, or converting loans into equity.

Question 2

What is the legal procedure to increase Authorized Share Capital in India?

Accepted Answer

Under Section 61 and 64 of the Companies Act, 2013, the company must: (1) Verify that its Articles of Association (AOA) authorize capital increase, (2) Convene a Board Meeting to approve the proposal and issue EGM notice, (3) Pass an Ordinary Resolution in an Extraordinary General Meeting (EGM), (4) Alter Clause V of the MOA, and (5) File Form SH-7 with the ROC within 30 days.

Question 3

What is the statutory deadline to file Form SH-7 on the MCA portal?

Accepted Answer

Under Section 64(1), Form SH-7 must be filed with the Registrar of Companies (ROC) within 30 days from the date of passing the ordinary resolution in the EGM. Missing the 30-day window attracts severe statutory late fees of ₹1,000 per day under Section 64(2). TaxQue files SH-7 within 48 hours.

Question 4

What government stamp duty and MCA fees are payable when increasing capital?

Accepted Answer

MCA filing fees and state-specific stamp duty on the increased capital amount are calculated dynamically on the MCA portal based on the state where your registered office is situated (e.g. Maharashtra, Delhi, Karnataka, Telangana). TaxQue provides an exact fee breakdown before filing.

Question 5

Who will manage our Capital Increase process at TaxQue?

Accepted Answer

Your capital increase is led by a practicing Company Secretary and Corporate Legal Specialist. We prepare the complete secretarial dossier—including Board Resolutions, EGM Notices, Ordinary Resolutions, altered MOA Clause V, and Form SH-7 certification.

Question 6

What if our Articles of Association (AOA) do not contain a clause authorizing capital increase?

Accepted Answer

Under Section 61(1), if your AOA lacks the enabling power, you must first alter the AOA by passing a Special Resolution in an EGM and filing Form MGT-14 along with Form SH-7. TaxQue drafts both the AOA amendment and SH-7 package.

Question 7

What documents are required to file Form SH-7?

Accepted Answer

You need: (1) Certified True Copy of EGM Ordinary Resolution, (2) Notice of EGM with Explanatory Statement under Section 102, (3) Altered copy of the Memorandum of Association (MOA) reflecting the new capital structure, and (4) Class 3 DSC of an authorized director.

Question 8

Does increasing Authorized Capital automatically increase Paid-Up Capital?

Accepted Answer

No. Increasing Authorized Capital merely expands your company's capacity to issue shares. To increase Paid-Up Capital, the company must subsequently allot shares to investors or founders and file Form PAS-3 (Return of Allotment) within 30 days. TaxQue handles both SH-7 and PAS-3 allotments.

Question 9

Can we increase Authorized Capital for issuing Employee Stock Options (ESOPs)?

Accepted Answer

Yes. Before granting ESOP pools to employees, companies often increase their authorized share capital to ensure sufficient unissued shares are available in the capital pool. We structure ESOP capital expansions.

Question 10

What are the penalties if a company issues shares exceeding its Authorized Capital?

Accepted Answer

Allotting shares beyond the authorized capital limit without filing Form SH-7 is void ab-initio and unlawful under Section 61, attracting personal fines on directors and rendering the share issue invalid. TaxQue ensures proper sequencing of capital expansion.

Question 11

How long does TaxQue take to process an Increase in Authorized Capital?

Accepted Answer

Drafting the secretarial resolutions, EGM notice, and altered MOA takes 24 to 48 hours. Once the EGM is conducted, Form SH-7 is filed immediately on the MCA portal.

Question 12

What happens after Form SH-7 is filed on the MCA portal?

Accepted Answer

The Registrar of Companies (ROC) reviews the altered MOA and stamp duty payment. Once approved, the company's Master Data on the MCA portal is updated to reflect the new Authorized Capital amount.

Question 13

Can a company increase its authorized capital multiple times in a year?

Accepted Answer

Yes. There is no legal restriction on how many times a company can increase its authorized capital as it raises multiple funding rounds or issues rights shares. TaxQue manages multi-round capital increases.

Question 14

What is the fee for Form SH-7 services with TaxQue?

Accepted Answer

We charge a transparent, fixed professional fee covering all EGM drafting, MOA alteration, Form SH-7 filing, and CS certification with zero hidden professional charges (government stamp duty is paid at actuals).

Question 15

How do we receive official confirmation of the capital increase?

Accepted Answer

The MCA system generates an official Approval Letter and updated Company Master Data showing the revised Authorized Capital, which we deliver for your board records and investor due diligence.

Question 16

What post-capital increase support does TaxQue provide?

Accepted Answer

We assist with issuing new Share Certificates (Form SH-1), updating the Register of Members (MGT-1), filing Return of Allotment (PAS-3), and stamping share certificates with state revenue authorities.

Feature & Deliverable Matrix	Basic	Standard★ Most Popular	Premium
Name Availability Verification & Portal Reservation Assistance	✓	✓	✓
Drafting of MOA, AOA / Deed & Statutory Declarations	✓	✓	✓
Official Government Portal Filing & Document Submission	✓	✓	✓
Certificate of Incorporation / Registration Delivery	✓	✓	✓
Entity PAN & TAN Allocation Coordination	✓	✓	✓
Assigned Company Secretary (CS) & Corporate Legal Advisor	—	✓	✓
Class-3 Digital Signature Certificates (DSC) & Director DINs	—	✓	✓
Assisted Corporate Bank Current Account Opening Setup	—	✓	✓
Mandatory EPFO, ESIC & State Tax Registrations Included	—	✓	✓
1st Board Meeting Resolutions & INC-20A Commencement Filing	—	—	✓
Custom Shareholder & Co-Founder Agreement Drafting (SHA/SSA)	—	—	✓
Free Comprehensive Trademark Brand Search & Class Verification	—	—	✓
Dedicated Corporate Advisory Desk for Annual ROC Compliances	—	—	✓

Document Type	Specific Records Required	Format / Specifications
Certified EGM Resolution	Certified true copy of Ordinary Resolution passed by shareholders in EGM	Signed by Director / Company Secretary
EGM Notice & Explanatory Statement	Notice convening EGM along with explanatory statement under Section 102	Dispatched to all members
Altered Memorandum of Association (MOA)	Updated MOA reflecting the increased authorized share capital in Clause V	Drafted as per Companies Act 2013
Director Class 3 DSC	Active Class 3 Digital Signature Certificate of authorized director	For MCA V3 electronic signing

Timeline / Delay Beyond EGM Date	Statutory Penalty under Section 64	Impact on Company
Within 30 Days of EGM Date	Normal MCA Registration Fee & Stamp Duty (Zero Penalty)	100% compliant status
Delay beyond 30 Days	₹500 per day continuing penalty on company and officers	Section 64 penalty notices issued
Allotment of Shares without SH-7	Illegal share allotment (Void in law)	Severe penalties under Section 42/62

Parameter	Statutory Rule / Threshold	Legal Reference
Shareholder Voting Threshold	Ordinary Resolution (Simple majority of votes cast)	Section 61(1)(a) Companies Act
MCA Filing Fee Slab	Graduated slab based on increase quantum (starts at ₹1,000+)	Companies (Registration Offices and Fees) Rules
State Stamp Duty	Varies by state of registered office (e.g., Delhi, Maharashtra, Karnataka)	Respective State Stamp Act

Parameter	TaxQue Secretarial Desk	Generic Automated Websites	Local Non-CS Agent
State Stamp Duty Calculation	Precise calculation matching state-specific stamp schedules	Often miscalculates stamp duty (triggers MCA rejection)	Unfamiliar with interstate stamp rules
Altered MOA Drafting	Professional formatting strictly compliant with Table A of Act	Generic one-line text	Outdated charter formatting
Future Share Allotment (PAS-3) Guidance	Includes advisory on subsequent private placement / rights issue	Zero share allotment guidance	Unaware of Section 62 allotment rules

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Authorized Capital Increase

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Increase Authorized Share Capital & MCA Form SH-7 Filing Services

What is Authorized Capital Increase?

Section 64 Heavy Late Penalty Alert

How to Get Started

Capital Structure Planning & AOA Scrutiny

Board Meeting & EGM Ordinary Resolution

MCA Form SH-7 Portal Filing & Stamp Duty Payment

Documents Required for Authorized Capital Increase

Statutory Deadlines & Penalty Matrix for Form SH-7

Shareholder Voting & Stamp Duty Thresholds

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Accurate Stamp Duty & MCA Fee Optimization

Complete Secretarial Resolution Suite

MCA Master Data Update Guarantee

Eligibility Criteria for Capital Increase

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