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Increase in authorized share capital

Nimita Jain (Company Secretary) (87 Points)

14 July 2016

Dear Experts.... Existing authorized share capital of Pvt. Ltd. co. is 2 Crores and directors wants to increase it by 3 Crores means total 5 Crores. For that we have to file e-form SH-7 and delay is more than 30 days. Please tell me the total fees Co. has to pay as i dont know how to calculate the total fee. I checked on MCA site but dont understand the method so unable to calculate. thankyou.

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Jainendra Kumar Singh (CS) (46 Points)
Replied 14 July 2016

If your company want to increase the authorised share capital by 3 crore then fees is rupees 75 per thousand after 1 crore and additioanl fees is 2.5% for the period of delay.

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CA Shree Jain (Chartered Accountant) (1572 Points)
Replied 14 July 2016

ROC - FEES STRUCTURE

Fees For Filing Various Documents or For Registering any Fact Under Companies Act, 2013 (Except for Form No SH. 7)
Nominal Share Capital		Fees per document
1.	Less than Rs. 100000	Rs. 200
2.	Rs. 100000 less than Rs. 500000	Rs. 300
3.	Rs. 500000 less than Rs. 2500000	Rs. 400
4.	Rs. 2500000 or more less than Rs. 1 Crore	Rs. 500
5.	Rs. 1 Crore or more	Rs. 600
Form No. SH 7 For Increasing Authorised Capital
The difference between the fee payable on the proposed Authorized Capital and on the existing Capital at the rates prevailing on date of filing.
For enhancement of Authorized Capital or for registration of a new company, an additional stamp duty is payable @ 0.15% of the increased authorized capital or fresh authorized capital of new company as per Delhi Stamp Act.

Fee on Applications (including Appeal) made to Central Government
	Application made by	OPC & Small Companies	Other than OPC & Small Companies
(i)	A Company having an authorized Share Capital of :
	(a) Upto Rs 25,00,000	1000	2000
	(b) More than Rs 25,00,000 and upto Rs 50,00,000	2500	5000
	(c) More than Rs 50,00,000 and upto Rs 5 Crores	N/A	10000
	(d) More than Rs 5 Crores and upto Rs 10 Crores	N/A	15000
	(c) More Than Rs 10 Crores	N/A	20000
(ii)	A Company limited by guarantee but not having share capital	-	2000
(iii)	Section 8 Company	-	2000
(iv)	Foreign Company	-	5000
(v)	Application for Allotment of DIN U/S 153	-	500

Additional Fees For Late Filing of Document
Document	Period of Delay	Rate of Additional Fee
Form No. SH 7 (increase in Share Capital)	Up to 6 Months	Beyond 6 Months
Form No. SH 7 (increase in Share Capital)	2.5% pm on normal fee	3% pm on normal fee
Other Documents	i) Upto 15 days (Sec. 93, 139 & 157)	One time of normal filing fee
	ii) More than 15 days and upto 30 days	Two times of normal filing fee
	iii) More than 30 days and upto 60 days	Four times of normal filing fee
	iv) More than 60 days and upto 90 days	Six times of normal filing fee
	v) More than 90 days and upto 180 days	Ten times of normal filing fee
	vi) More than 180 days and upto 270 days	Twelve times of normal filing fee

Other Fee to be Paid
Inspection of File and Charges	Charges
File Inspection	Rs. 100
Charges Inspection	Rs. 100
Fees for Obtaining Certified Copy
Certificate of Incorporation	Rs. 100
Other Certified Copies	Rs. 25 per page

ROC Fee Structure (As per Companies Act, 1956)

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Nimita Jain (Company Secretary) (87 Points)
Replied 14 July 2016

So according to me as i calculated the total fee payble is Rs. 2,25,000/- and late fee is Rs. 5,625/-

Is it correct ??

CA Shree Jain (Chartered Accountant) (1572 Points)
Replied 14 July 2016

Rs. 2,25,000 Is Correct fees for Increase the Authroised Share Capital..

1 Like

Nimita Jain (Company Secretary) (87 Points)
Replied 14 July 2016

thanku so much sir..

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Nimita Jain (Company Secretary) (87 Points)
Replied 15 July 2016

alteration in MOA for increase in Authorized Share Capital require Special Resolution or Ordinary Resolution??

Jainendra Kumar Singh (CS) (46 Points)
Replied 15 July 2016

Ordinary resolution required provided AOA has power increase the authorised share capital.

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CA Shree Jain (Chartered Accountant) (1572 Points)
Replied 15 July 2016

Procedure for Increase in Authorize share Capital

1. Authorisation in Article is must for Increase: For Increase in Authorise Share Capital, the company has to make sure that its Articles of Association contain a provision authorising it to increase its authorized share capital. Reason being Section 61 of the Companies Act, 2013, mandates that for increasing the Authorised share capital, authorization in Articles of Association is a pre-condition.

In other words Company has to make sure that its Articles of Association contain a provision authorising it to increase its authorised share capital.

So first check whether there is enabling provision in the Articles of Association regarding increase in authorised share capital.

If there is no such provision then the company has to take steps for alteration of its Articles of Association in accordance with the provision of Section 14 of the Companies Act, 2013, so as to insert the clause enabling increase in the Authorised share capital of the Company.

2. Calling of Board Meeting: Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013, for convening a meeting of the Board of Directors. Main agenda for this Board meeting would be:

a. To Get in-principal approval of Directors for Increase in authorised share Capital;

b. Fix date, time and place for holding Extra-ordinary General meeting (EGM) to get approval of shareholders, by way of Ordinary Resolution, for amendment in authorised share Capital clause of Memorandum of Association. This amendment in authorised share Capital clause of Memorandum of Association shall be in accordance with the requirement of section 61 of the Companies Act, 2013;

c. To approve notice of EGM along with Agenda and Explanatory Statement to be annexed to the notice of General Meeting as per section 102(1) of the Companies Act, 2013;

d. To authorise the Director or Company Secretary to issue Notice of the Extra-ordinary General meeting (EGM) as approved by the board under clause 2(c) mentioned above.

3. Issue Notice of the Extra-ordinary General meeting (EGM) to all Members, Directors and the Auditors of the company in accordance with the provisions of Section 101 of the Companies Act, 2013;

4. Holding of General Meeting: Hold the Extra-ordinary General meeting (EGM) on due date and pass the necessary Ordinary Resolution under section 61(1)(a) of the Companies Act, 2013, for increase in authorize share capital of the Company.

5. ROC Form filing: File form SH-7 within 30 days of passing of Ordinary Resolution with the concerned Registrar of Companies, with prescribed fees and along with following attachments as desired by section 64:

a. Notice of EGM;

b. Certified True copy of Ordinary Resolution;

c. Altered Memorandum of Association.

6. Concerned Registrar of Companies (ROC) will check the E-forms and attached documents and will approve the increase in authorize share capital.

Notice to be given to Registrar for alteration of share capital.

As per section 64 of the Companies Act, 2013, where a company alters its share capital for increase in authorised share capital in accordance with sub-section (1) of section 61, the company shall file a notice in the prescribed form with the Registrar within a period of thirty days of such increase along with a copy of altered Memorandum.

No need to pass Special Resolution for increase in authorised share capital

Some professionals are of the view that for increase in authorised share capital Special Resolution is to be passed, since amendment in Memorandum of Association can be done by way of passing Special Resolution under section 13 of the Companies Act, 2013.

Kindly appreciate amendment in Memorandum of Association by way of passing Special Resolution is required only when there is a change in particular clause of MOA like alteration in name clause or alteration in registered office clause, as envisaged in Section 13.

Amendment in capital clause of Memorandum of Association for the purpose of increase in authorised share capital is exclusively governed by Section 61of the Companies Act, 2013 and section 61 is silent about the nature of shareholders’ resolution. So in the above scenario an Ordinary Resolution would be enough for increase in authorised share capital.

SECRETARIAL PRACTICE / DRAFTING

Sample Board Resolution for:

A. Increase in Authorised Share Capital

“RESOLVED THAT pursuant to the provisions of Section 61 and 64 and other applicable provisions, if any, of the Companies Act, 2013 (including any amendment thereto or re-enactment thereof) and the rules framed there under, the consent of the Board of Directors of the Company be and is hereby accorded, subject to the approvals of shareholders in the General meeting, to increase the Authorized Share Capital of the Company from existing Rs. 50,00,000 (Rupees Fifty Lacs) divided into 5,00,000 (Five Lacs) Equity Shares of Rs. 10/- each to Rs. 75,00,000 (Rupees Seventy Five Lacs) divided into 7,50,000 (Seven Lacs Fifty Thousand) Equity Shares of Rs. 10/- each by creation of additional 2,50,000 (Two Lacs Fifty Thousand) Equity Shares of Rs. 10/- each ranking pari passu in all respect with the existing Equity Shares of the Company.

B. Alteration in the Capital Clause of Memorandum of Association

“RESOLVED THAT pursuant to the provisions of Section 13, 61 and 64 and other applicable provisions of the Companies Act, 2013 (including any amendment thereto or re-enactment thereof) and the rules framed thereunder, the consent of the Board of Directors of the Company be and is hereby accorded, subject to the approvals of shareholders in the General meeting, for substituting Clause V of the Memorandum of Association of the Company with the following clause.

V. The Authorised Share Capital of the Company is Rs. 75,00,000/- (Rupees Seventy Five Lacs) divided into 7,50,000 (Seven Lacs Fifty Thousand) Equity Shares of face value of Rs. 10/- (Rupees Ten) each.”

Sample Shareholders’ Resolution to be passed in the General Meeting:

a. Increase in Authorised Share Capital

SPECIAL BUSINESS

1. To consider, and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 61 read with Section 64 and other applicable provisions, if any, of the Companies Act, 2013 (including any amendment thereto or re-enactment thereof) and the rules framed there under, the consent of the members of the Company be and is hereby accorded to increase the Authorized Share Capital of the Company from existing Rs. 50,00,000 (Rupees Fifty Lacs) divided into 5,00,000 (Five Lacs) Equity Shares of Rs. 10/- each to Rs. 75,00,000 (Rupees Seventy Five Lacs) divided into 7,50,000 (Seven Lacs Fifty Thousand) Equity Shares of Rs. 10/- each by creation of additional 2,50,000 (Two Lacs Fifty Thousand) Equity Shares of Rs. 10/- each ranking pari passu in all respect with the existing Equity Shares of the Company.

RESOLVED FURTHER THAT the Memorandum of Association of the Company be altered in the following manner i.e. existing Clause V of the Memorandum of Association be deleted and the same be substituted with the following new clause as Clause V:

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors of the Company (hereinafter referred to as “Board” which term shall include a Committee thereof authorized for the purpose) be and is hereby authorized to take all such steps and actions and give such directions as may be in its absolute discretion deemed necessary and to settle any question that may arise in this regard, without being required to seek any further consent or approval of the shareholders or otherwise and that the shareholders shall be deemed to have given their approval thereto expressly by the authority of this resolution.”

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CA Shree Jain (Chartered Accountant) (1572 Points)
Replied 15 July 2016

By way of Ordinary Resolution, for amendment in authorised share Capital clause of Memorandum of Association. This amendment in authorised share Capital clause of Memorandum of Association shall be in accordance with the requirement of section 61 of the Companies Act, 2013...

1 Like

Nimita Jain (Company Secretary) (87 Points)
Replied 15 July 2016

thank you so much..

Archana singh (2 Points)
Replied 26 February 2018

Dear All,

Can we pass an omnibus resolution or rather a one time approval for increase in in authorized capital by mentioning a limit and not specific details of increase. Also after this approval can the Board alone can take the power to decide the increase in authorized capital as approved by the shareholders already. Is it possible or right way?Kindly provide a sample resolution if possible.

Suresh Dubey (2 Points)
Replied 27 May 2019

I am the sole director of an OPC within intail capital of 100000/- Now I want to add additional 250000/- to meet the initial expenses, please let me know what procedure I need to follow? thank you.