SH-7: Share Capital Increase — Form, Process, Stamp Duty (2026)

When is SH-7 required?

SH-7 (formerly Form 5) is the notice to RoC about increase in authorised share capital under Section 64 of the Companies Act, 2013. File SH-7 within 30 days when:

• You want to issue more shares than the current authorised capital permits
• You want to bring in new investors but current authorised capital is fully subscribed
• You're preparing for a funding round and need headroom

Note: SH-7 is for AUTHORISED capital. For actual share issuance, file PAS-3 separately.

Process — 5 steps

1. Check MoA — MoA's capital clause must allow the new amount. If higher than MoA limit, MoA amendment is needed (covered next).
2. Board Meeting — Pass board resolution approving the increase
3. General Meeting — Pass ordinary resolution (special if AoA requires) increasing authorised capital
4. Amend MoA — Modify Capital Clause of MoA to reflect new authorised capital
5. File SH-7 within 30 days with attachments:
   • EGM notice and resolution
   • Amended MoA
   • Explanatory statement
   • Altered AoA (if applicable)

Filing fee and stamp duty

Two costs apply:

1. MCA filing fee — Based on increased capital amount (the difference, not total):

• Up to ₹1 lakh: ₹5,000
• ₹1-5 lakh: ₹5,000 + ₹400/each additional ₹10,000 (or part)
• ₹5-25 lakh: ₹21,000 + ₹300/each additional ₹10,000
• ₹25 lakh-1 crore: ₹81,000 + ₹100/each additional ₹10,000
• Above ₹1 crore: ₹156,000 + ₹50/each additional ₹10,000 (capped at ₹2.5 lakh)

2. State stamp duty — Varies by state, typically 0.15-0.5% of increase. Example: ₹5 lakh increase in Maharashtra (0.2%) = ₹1,000 stamp duty.

Strategic considerations

Practical tips for founders:

• Increase generously — Filing fee scales with amount but not linearly. Going from ₹10 lakh to ₹50 lakh costs ~₹50,000. Going to ₹1 crore costs ~₹70,000. Better to plan 2-3 years ahead.
• Authorised vs paid-up — Authorised is the ceiling. Paid-up is actual money received. You can have ₹1 crore authorised with ₹10 lakh paid-up — no obligation to issue full authorised capital.
• Before fundraise — Always increase authorised capital before signing term sheet. Investors expect headroom for full subscription + 10-20% buffer for ESOPs.

Related forms after SH-7

SH-7 just increases authorised capital. To actually issue shares to investors:

• Board/EGM resolution — Authorising allotment
• Money received — In company bank account
• Share allotment — Board allots shares to investors
• PAS-3 — File within 30 days of allotment with allotment details, list of allottees, valuation report (if applicable)
• Share certificates — Issue to investors within 60 days
• FC-GPR — If allotment is to foreign investor, file within 30 days (RBI compliance)