Change in Authorized Capital


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The company may look to expand operations as well in terms of size, scale, and organizational structure when business starts to take up. The company may need to receive additional funding, raising its share capital, in order to realize that dream. The maximum amount of capital that is now authorized occasionally exceeds the amount of capital that is necessary. The maximum amount of capital for which the company may issue shares to the shareholders is known as the Authorized Capital.

The Authorized Capital limit is stated in the Memorandum of Association under the Capital Clause in accordance with Section 2(8) of the Companies Act of 2013. In order to issue more shares, a company may take the necessary steps to raise the authorized capital limit, but it is never permitted to issue shares in excess of the authorized capital limit.



Go through the Articles of Association carefully.

The Articles of Association include the regulations and principles for the company’s internal operations. Hence, before taking any action on the increase or decrease in the authorized capital, it is necessary to check the Articles of Organization to see if a clause permits a change in the company’s authorized capital. The procedure is made simpler if the clause is present. If the clause is absent, the Articles of Organization must first be changed per Section 14 of the Companies Act of 2013 (the “Act”). Only then can the business proceed with changing the authorized capital.

Board Meeting

Organizing the Special General Meeting

The issue of the increase or decrease in the share capital is brought up after the meeting has begun. After that, voting is conducted in a preset manner to decide the matter. Once the resolution has received approval and been adopted, the explanatory statement is attached, and the Authorized Capital is modified.



A firm must submit Form SH-7 and Form MGT-14 (if applicable) to the registrar within 30 days of the resolution’s passage, together with the required costs.

Form SH – 7

Within 30 days of passing the relevant resolution, this form must be submitted to the RoC. This form’s purpose is to inform the registrar of the specifics of the increase in authorized capital. The following information is entered into the form on the MCA portal:

Form MGT-14

This form must be submitted to the RoC within 30 days of passing the relevant resolution. The following information must be entered into the form on the MCA portal:

The following attachments are to be provided:

Suppose there is any further optional attachment. In order to prevent penalties or further punishment for which the firm and its officers may be held accountable, the forms must be delivered within the time frame specified.

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