1. Check the Articles of Association (AOA)
Before starting the process, verify if your company's AOA has an enabling clause that permits an increase in authorized share capital. If it does not, you must first amend the AOA by passing a special resolution Section 14.
2. Hold a Board Meeting
Call a board meeting by giving a minimum of 7 days' notice to directors. During this meeting, the board must pass resolutions to:
- Approve the proposed increase in authorized capital.
- Amend Clause V (the Capital Clause) of the Memorandum of Association (MOA).
- Convene an Extraordinary General Meeting (EGM) or Annual General Meeting (AGM) to get shareholder approval.
3. Obtain Shareholder Approval
Issue a 21-day notice for the General Meeting (unless 95% of members consent to a shorter notice period). During the meeting, table the proposal and pass an ordinary resolution under Section 61(1)(a) of the Act to authorize the alteration.
4. File MCA Forms
Following the general meeting, specific forms must be filed on the Ministry of Corporate Affairs (MCA) portal:
- Form SH-7: This must be filed within 30 days of passing the resolution. You must attach a copy of the resolution, an explanatory statement, and the altered MOA.
- Form MGT-14: Required if you also had to alter the AOA in Step 1.
5. Fees and Stamp Duty
You will need to pay government filing fees (which scale based on the newly increased share capital amount) as well as the applicable state stamp duty on capital alteration. The updated MOA and AOA will then be officially updated by the ROC.