You cannot issue more shares than your authorised capital allows. So before a funding round or a fresh allotment, many companies need to increase their authorised share capital — a quick MCA process once you know the steps. This guide explains the difference between authorised and paid-up capital, the exact process, the forms, and the stamp duty you should budget for.
- Authorised capital is the ceiling; paid-up capital is what is actually issued.
- First check the AOA permits an increase — amend it if it does not.
- Pass a board resolution, then an ordinary resolution at a general meeting.
- File SH-7 within 30 days, with revised stamp duty and MCA fees.
Authorised vs paid-up capital
| Authorised capital | Paid-up capital | |
|---|---|---|
| What it is | Maximum you can issue | What shareholders have actually paid |
| Changed by | SH-7 filing | Allotment (PAS-3) |
| Limit | Set in the MOA | Cannot exceed authorised |
The process
- Check the AOA permits an increase (amend it first if not).
- Pass a board resolution, then an ordinary resolution at a general meeting.
- File SH-7 with the MCA within 30 days, paying the revised stamp duty and fees.
“Authorised capital is the ceiling; paid-up capital is what is actually issued. You raise the ceiling first, then issue.”
Frequently asked questions
Do I need to increase authorised capital before every allotment?
Only if the new allotment would push paid-up capital above the current authorised limit. If there is headroom, you can allot directly via PAS-3.
What if my AOA does not allow an increase?
You first amend the AOA by special resolution (filed in MGT-14), then proceed with SH-7.
How long does the SH-7 process take?
Usually a few days once the resolution is passed, subject to MCA processing. The 30-day filing window from the resolution is the key deadline.
Increasing authorised capital usually comes just before an allotment, so the two are best planned together. Our authorised capital service handles the resolutions and SH-7 filing. See all company and ROC services.
