To increase authorised capital, a company alters the capital clause of its memorandum at a general meeting and files Form SH-7 within 30 days, paying an MCA fee and state stamp duty. This guide explains how the SH-7 fees and the stamp duty on an increase in authorised capital are worked out, with a dated example, and what to do once the room exists. The SH-7 fee is the difference between the table fees on the new and old capital, so you pay only for the slice you add.
What does increasing authorised capital actually change?
It raises the limit in the memorandum on how much share capital the company can issue. It does not bring in money or create shares by itself: those come later, when the company allots shares within the new limit. You need the increase before any allotment that would take issued capital above the current figure.
Typical triggers are a seed or Series A round, a rights issue to existing shareholders, or bringing in a new co-founder with fresh shares. Under section 61 of the Companies Act 2013 the company can make the increase only if its articles allow it, so check the articles first and amend them if they do not.
How are SH-7 fees calculated?
The SH-7 fee is the registration fee on the new authorised capital minus the fee on the existing capital, both read from the Table of Fees. Going from ₹1 lakh to ₹20 lakh costs ₹66,000 minus ₹5,000, so ₹61,000 for most companies. An OPC or small company uses the lower table: ₹22,000 minus ₹2,000, so ₹20,000.
Because the fee on your existing capital is deducted even if you paid nothing at incorporation, a company formed in the nil-fee band never pays for that first slice. A company formed at ₹15 lakh that later moves to ₹25 lakh pays ₹30,000 (₹81,000 minus ₹51,000), not ₹81,000.
Two edge cases for OPCs and small companies, both settled by the SH-7 instruction kit:
- Increase within ₹10 lakh. The lower table charges a flat ₹2,000 up to ₹10 lakh, so the difference is nil. The normal filing fee then applies by nominal capital: ₹300 for capital from ₹1 lakh to ₹4,99,999 and ₹400 from ₹5 lakh to ₹24,99,999.
- New capital above ₹50 lakh. The lower table stops at ₹50 lakh, so the fee is the table for other companies on the new capital minus the OPC and small-company fee on the existing capital.
A small company, from 1 December 2025, is a private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore, under G.S.R. 880(E). Both limits must be met.
How is stamp duty on an increase in authorised capital worked out?
Stamp duty is a state levy, paid with SH-7 on the MCA portal for the state of the registered office. In Maharashtra it is 0.3% of the increase, capped at ₹1 crore, since 14 October 2024, when it rose from 0.2% with a ₹50 lakh cap. An increase of ₹19 lakh pays ₹5,700, where it would have paid ₹3,800 before.
For states other than Maharashtra, the duty depends on that state's Stamp Act and is confirmed in your quote; the SH-7 fee the calculator shows still applies. Older official tables are a trap here: the MCA's state-wise e-stamp table still shows Maharashtra at ₹1,000 for every ₹5 lakh of increase, a rate replaced in 2015 and again in 2024. Whether Maharashtra's ₹1 crore cap counts duty already paid on earlier capital is not settled in the Article, which matters only for very large companies.
Worked example: making room for a seed round
A Pune startup was formed with ₹1 lakh authorised capital. Before a seed round it needs ₹20 lakh. The members pass the resolution on 25 November 2026, so SH-7 is due by 25 December 2026.
| Item | Most companies | OPC or small company |
|---|---|---|
| Table fee on ₹20 lakh | ₹66,000 | ₹22,000 |
| Less table fee on ₹1 lakh | ₹5,000 | ₹2,000 |
| SH-7 fee | ₹61,000 | ₹20,000 |
| Maharashtra stamp duty (0.3% of ₹19 lakh) | ₹5,700 | ₹5,700 |
| Total government cost | ₹66,700 | ₹25,700 |
| Extra for each month late, first 6 months (2.5%) | ₹1,525 | ₹500 |
| Extra for each month late after 6 months (3%) | ₹1,830 | ₹600 |
Watch out. The late fee is the smaller risk. Under section 64, missing the 30-day deadline also exposes the company to a penalty of ₹500 a day, up to ₹5 lakh, and each officer in default to ₹500 a day, up to ₹1 lakh. A filing three months late can cost more in penalty than the SH-7 fee itself.
What comes after the increase: allotting the shares
After the increase, the board and, where needed, the members approve the allotment under the chosen route, such as a rights issue or private placement. The company then pays stamp duty of 0.005% on the issue value under Article 56A of the Indian Stamp Act Schedule I, allots the shares and makes the MCA filings.
For the seed round above, issuing shares worth ₹15,00,000 at face value means stamp duty of ₹75. If the investor is outside India, check the entry route with the FDI route checker before you allot, and work out the issue duty with the share transfer stamp duty calculator.
Common mistakes when increasing authorised capital
The most expensive mistake is increasing far beyond the next two or three years' needs, because both the fee and the duty grow with the increase. A company at ₹25 lakh that needs ₹50 lakh pays ₹82,500 in SH-7 fee and Maharashtra duty. Going to ₹2 crore instead costs ₹2,52,500 (₹2,00,000 fee and ₹52,500 duty), ₹1,70,000 more for room it may never use.
Because the fee is a difference, two smaller increases on the same fee table cost the same in MCA fees as one large one, so there is no saving in going early.
- Entering the increase instead of the total. The calculator asks for the new authorised capital after the increase, not the amount added.
- Skipping the articles check. Section 61 allows the increase only when the articles authorise it, so alter them first if they do not.
- Counting the deadline from the board meeting. The 30 days run from the members' resolution, not from the board meeting that called it.
- Claiming the small-company rate without checking. It applies only while paid-up capital and turnover are both within the limits, and never to a holding or subsidiary company.
If you are about to incorporate rather than increase, set a sensible starting figure with the incorporation fee and stamp duty calculator.
How Ofin can help
Ofin's increase in authorised capital service starts at ₹9,999. It covers drafting the notice, board and members' resolutions and the altered memorandum, and filing SH-7, with the government fee and stamp duty paid at actuals. Send the calculator's result with your resolution date and we will confirm the total and the filing deadline in writing.
