Authorized Capital Increase – MCA Filing
Increasing a company’s authorized share capital enables it to issue more shares or raise funds. The process requires board and shareholder approval, followed by filing with the MCA to maintain compliance under the Companies Act, 2013.
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Increase your company’s authorized capital online with MCA approval. We handle board resolutions, shareholder approvals, and necessary filings to ensure compliance with the Companies Act, 2013.
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Company Authorized Capital Increase
Each business needs more funds over time to run business. These funds can be required on a long- and short-term basis. A short-term need can be satisfied by taking loans and advances. But in the long run, the company will require more funds. For a Private Limited Company, this can be done by increasing the company's authorised capital. Since the private limited company is governed and regulated under the Company Act to make changes in the structure, it is necessary to follow the Act and the rules stated.
Smartmudra360 makes it easy to increase your company's authorised capital. Our experts guide you through every step, ensuring a hassle-free experience.
What is Authorized Capital?
According to Section 2 (8) of the Companies Act 2013, “Authorized Capital” is the capital authorised by the company's memorandum to be the maximum amount of the share capital of the company.
The company can expand its business to the level of the authorised capital. If the company has to expand the business, infusing more funds than at first, the company has to increase the authorised capital.
Authorised and Paid-Up Capital of a Company
Authorised share capital represents the total potential value of shares a company can issue. In contrast, paid-up capital is the actual value of shares that have been fully issued, subscribed to, and paid for by shareholders. The company cannot exceed its authorised share capital with its paid-up capital. Therefore, if a company's paid-up capital reaches the limit of its authorised capital and it aims to welcome new shareholders, it has two options:
Either increase its authorised share capital and then issue new shares or
Authorised Share Capital Increase
Authorised share capital increase refers to raising the maximum amount of share capital that a company is legally permitted to issue to its shareholders. This is typically achieved through an amendment to the company's Memorandum of Association (MOA)
By increasing the authorised share capital, a company expands its capacity to issue additional shares, enabling it to raise funds from existing or new shareholders. This process is often undertaken to support business expansion, finance new projects, or meet evolving financial needs.
Amending the MOA for Increasing Authorized Capital
During the formation of a Private Limited Company, the initial authorised and paid-up capital levels are established in the company's Memorandum of Association (MOA). This sets the maximum amount of share capital that the company is allowed to issue to its shareholders. Should the company aim to exceed this predetermined cap by issuing additional shares, it necessitates an amendment to the MOA to raise the authorised capital threshold, thereby accommodating the issuance of new shares beyond the original limit.
Identity & Address Proof Documents in India
- PAN Card of the proprietor
- Aadhaar Card / Voter ID / Passport
- Passport-size photographs
Business Proof Documents in India
- Business address proof (electricity bill, rent agreement)
- Bank account details in the name of the business
- Trade name or business name details
Registration Prerequisites in India
- GST registration (if turnover exceeds threshold)
- MSME/Udyam registration certificate
- Shop and Establishment licence (state-specific)
What are the Sole Proprietorship Registration Fees & Penalties in India?
The sole proprietorship registration cost in India varies depending on the type of registration chosen. Below is a detailed breakdown:
Registration Fee Structure in India
| Registration Type | Government Fee | Professional Fee (Approx.) |
|---|---|---|
| GST Registration | Free | ₹500 – ₹2,000 |
| MSME/Udyam Registration | Free | ₹500 – ₹1,500 |
| Shop & Establishment Licence | ₹100 – ₹1,000 | ₹1,000 – ₹3,000 |
| Trade Licence | ₹500 – ₹5,000 | ₹1,000 – ₹3,000 |
Penalties for Non-Compliance in India
- GST non-registration penalty: 10% of tax due or ₹10,000, whichever is higher
- Late GST return filing: ₹50 per day (₹20 for nil returns)
- Non-filing of ITR: Penalty up to ₹5,000 under Section 234F
What is a Sole Proprietorship Registration Certificate in India?
A sole proprietorship certificate is an official document that proves the legal existence of your business. Since there is no single unified registration, the proprietorship registration certificate may be one or a combination of the following:
Types of Registration Certificates in India
- GST Registration Certificate – Issued by the GST department
- Udyam Registration Certificate – Issued by the MSME Ministry
- Shop & Establishment Certificate – Issued by local municipal authorities
Importance of the Certificate in India
The proprietorship registration certificate is essential for opening a proprietorship bank account, applying for business loans, and entering into legal contracts. It also acts as proof of business identity for government tenders and schemes. Visit IndiaFilings to get expert assistance in obtaining your registration certificate.
How to Check Sole Proprietorship Registration Status in India?
Once you have applied for registration, you can track the sole proprietorship registration process status through the respective portals:
Check via GST Portal in India
- Visit the official GST portal at gst.gov.in
- Click on "Track Application Status"
- Enter your ARN (Application Reference Number)
- View the current status of your GST registration
Check via MSME/Udyam Portal in India
- Visit udyamregistration.gov.in
- Click on "Print/Verify Udyam Certificate"
- Enter your Udyam Registration Number and OTP
- Download and verify your Udyam registration proprietorship certificate
Check via Shop & Establishment Portal in India
Visit your respective state's Labour Department portal and enter your application number to track the status of your shop and establishment registration.
What are the Steps to Register the Sole Proprietorship Firm in India?
What are the Steps to Register the Sole Proprietorship Firm in India?Here is a simple step-by-step guide for how to register sole proprietorship in India:
Eligibility of Partners in IndiaStep-by-Step Registration Process in India
- Step 1 – Choose a Business Name: Select a unique trade name for your sole proprietorship firm online registration. Ensure it does not infringe on any existing trademarks.
- Step 2 – Obtain PAN Card: Apply for a PAN card in the proprietor's name. The sole proprietorship PAN card is mandatory for all tax-related activities.
- Step 3 – Open a Current Bank Account: Open a current bank account in the name of the business for proprietorship bank account opening.
- Step 4 – GST Registration: Apply for GST registration sole proprietorship if your annual turnover exceeds ₹20 lakhs (₹10 lakhs for special category states).
- Step 5 – MSME/Udyam Registration: Register under the MSME registration for proprietorship to avail government benefits and subsidies.
- Step 6 – Shop & Establishment Licence: Obtain a shop and establishment registration from your local municipal authority.
What are the Additional Registrations Required for a Sole Proprietorship Firm in India?
Depending on the nature of your business, additional registrations may be required for a sole proprietor firm in India:
FSSAI Registration in India
If you are involved in the food business, you must obtain an FSSAI licence from the Food Safety and Standards Authority of India.
Import Export Code (IEC) in India
For businesses involved in import or export activities, an Import Export Code (IEC) is mandatory from the DGFT.
Trade Licence in India
A trade licence proprietorship is required from local municipal authorities to conduct specific trade or business activities.
What is the Sole Proprietorship Registration Time in India?
The time taken to register a proprietorship india depends on the type of registration chosen:
Registration Timeline in India
| Registration Type | Time Required |
|---|---|
| GST Registration | 3 – 7 Working Days |
| MSME/Udyam Registration | 1 – 2 Working Days |
| Shop & Establishment Licence | 7 – 15 Working Days |
| Trade Licence | 15 – 30 Working Days |
What are the Post-Registration Compliance Requirements for Sole Proprietorship in India?
After completing the proprietorship business registration, the owner must adhere to the following compliance requirements:
Income Tax Return (ITR) Filing in India
A sole proprietor must file proprietorship income tax return under their individual PAN. The applicable ITR form is ITR-3 or ITR-4 (Sugam), depending on the nature of income. The due date is typically July 31st of each assessment year.
GST Return Filing in India
If registered under GST, the proprietor must file monthly or quarterly GST returns (GSTR-1, GSTR-3B) and an annual GST return (GSTR-9).
Other Statutory Compliances in India
- Renewal of Shop & Establishment licence annually
- Maintenance of proper books of accounts
- Tax Deducted at Source (TDS) compliance if applicable
- Professional tax payment (state-specific)
Why Choose Nexta for Sole Proprietorship Firm Registration Services in India?
Nexta is India's leading business registration for individuals platform, helping thousands of entrepreneurs register their sole proprietorship firms every year. Here's why IndiaFilings is the best choice:
Expert Assistance in India
- Experienced professionals with deep knowledge of proprietorship firm registration online
- End-to-end support from documentation to certificate delivery
- Dedicated relationship manager for each client
Affordable & Transparent Pricing in India
- No hidden charges – transparent fee structure
- Cost-effective packages for small business registration india
- Flexible payment options available
Fast & Reliable Service in India
- Quick turnaround time for all registrations
- Real-time tracking of your application status
- Trusted by over 1 million businesses across India
Whether you are looking to register a proprietorship india, IndiaFilings provides comprehensive solutions. Get started today with our proprietorship Experts
Frequently asked questions
Common questions about Increase Authorised Capital.
What is Authorized Capital?
Authorized capital, as per Section 2 (8) of the Companies Act 2013, represents the maximum amount of share capital a company can issue as stated in its memorandum.
How can a company increase its authorized share capital?
Starting a business in India requires compliance with various legal requirements, including registering the business, obtaining necessary licenses and permits, and complying with labor and tax laws. Some of the essential legal requirements for starting a business in India include choosing a business structure, registering your business name, obtaining a Director Identification Number (DIN), incorporating the business, obtaining PAN and TAN, securing other required licenses and permits, ensuring labor law compliance, meeting tax compliance requirements, obtaining insurance, and opening a business bank account.
What documents are required for increasing authorized capital?
A company is required to maintain the compliances once the company is incorporated. The auditor is to be appointed within 30 days. Additionally, there is income tax filing and annual return filing that is to be done every year.
What happens if the Articles of Association do not permit changes?
The statutory audit as the name suggests is a mandatory audit for all companies. All the entities that are unregistered under the Companies Act as Private or Public Limited Companies need to get the books of accounts audited every year.
What is Form MGT-14, and why is it required?
The Private Limited Companies are required to file the annual accounts and the returns that disclose the details of the shareholder and the directors to the ROC.
What is the difference between Authorized and Paid-Up Capital?
Authorized capital is the maximum potential value of shares a company can issue, while paid-up capital is the actual value of shares that have been issued and paid for.
Why would a company consider increasing its authorized capital?
A company can appoint a statutory auditor either for five consecutive years or till the conclusion of the next Annual general meeting. Therefore, an appointment of the statutory auditor cannot be considered as a part of annual compliance.
What is the procedure to increase authorized share capital?
The annual general meeting (AGM) is held for the management and the shareholders to interact with each other. The Companies Act,2013 makes it compulsory to hold meetings to discuss the yearly results and appoint auditors.
How is the Extraordinary General Meeting (EGM) conducted?
The companies incorporated under the Companies Act,1956 are required to file the following documents with the ROC The balance sheet in form 23AC which is to be filed by all the companies Profit and loss account in form 23ACA which is to be file by all the companies.
What is the purpose of filing Form SH-7?
After the AGM all the private limited companies are required to file the annual return within 60 days of holding the annual general meeting.