Increase Share Capital

Under the Companies Act, 2013, the Authorized Share Capital of a company is the maximum limit of share capital that the company is legally authorized to issue to its shareholders. When a startup or corporate entity plans to raise external funding, onboard new investors, or issue bonus shares, the required funding amount often exceeds the existing authorized capital limit. In such cases, the company must follow a statutory corporate procedure to increase its Authorized Share Capital. This process involves convening a Board Meeting, passing an ordinary resolution at an Extraordinary General Meeting (EGM), altering the Capital Clause (Clause V) of the Memorandum of Association (MoA), and filing Form SH-7 with the Ministry of Corporate Affairs (MCA) along with the payment of statutory stamp duty based on the increased capital amount.

Any active Private Limited Company, One Person Company (OPC), or Public Limited Company registered under the Companies Act in India is eligible to increase its authorized capital.