Increase in Share Capital Services

An increase in share capital allows a company to raise additional funds by issuing more shares or enhancing its authorized share capital. This process is governed by the Companies Act, 2013 and requires approval from the shareholders and proper filing with the Registrar of Companies (ROC). Whether for expansion, new investments, or compliance needs, our experts provide end-to-end assistance for capital increase, from documentation to ROC filing.

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    Types of Increase in Capital

    The method of increasing capital depends on the company’s requirements and structure.

    Increase in Authorized Share Capital

    Raising the maximum capital a company can issue by altering the Memorandum of Association (MOA).

    Increase in Paid-up Share Capital

    Issuing additional shares against the authorized capital to existing or new shareholders.

    Rights Issue of Shares

    Offering additional shares to existing shareholders in proportion to their holdings.

    Bonus Issue of Shares

    Issuing free shares to existing shareholders out of the company’s reserves or profits.

    Private Placement of Shares

    Issuing shares to a select group of investors, such as promoters, venture capitalists, or institutions.

    Preferential Allotment of Shares

    Issuing shares to specific investors with preferential rights over ordinary shareholders.

    Why Increase in Capital is Important?

    Facilitates Business Expansion

    Provides funds to support growth, new projects, or acquisitions.

    Improves Financial Strength

    Strengthens the balance sheet and enhances borrowing capacity.

    Attracts Investors

    Helps bring in new investors through equity financing.

    Ensures Legal Compliance

    Authorized capital must be increased before issuing additional shares to avoid non-compliance.

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    FAQs

    What is the difference between authorized and paid-up capital?

    Authorized capital is the maximum limit a company can issue, while paid-up capital is the actual capital issued and subscribed by shareholders.

    It requires board and shareholder approval, alteration of MOA, and filing Form SH-7 with ROC.

    No, only shareholder approval and ROC filing are required, unless the company operates in regulated industries.

    Yes, provided it follows due process, gets shareholder approval, and files the necessary forms with ROC.

    Usually 2–3 weeks, depending on documentation and ROC approval.