Filings for alteration in Authorised Share Capital
Alteration in Share Capital: Navigating Filings & Compliance with Account Assure
As a dynamic business, your company’s capital structure may need to evolve to support growth, strategic objectives, or market changes. Any modification to your company’s share capital, whether an increase, reduction, consolidation, or subdivision, requires meticulous adherence to the provisions of the Companies Act, 2013, and timely filings with the Ministry of Corporate Affairs (MCA). At Account Assure, we provide comprehensive services for all filings related to share capital alteration, ensuring seamless compliance and a robust capital structure for your business.
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What is Alteration in Share Capital?
Alteration in Share Capital refers to any change made to the nominal (authorized), issued, subscribed, or paid-up share capital of a company. Such changes are governed by Section 61 of the Companies Act, 2013, and must be authorized by the company’s Articles of Association (AoA) and approved by shareholders.
Common types of share capital alteration include
Increase in Authorized Share Capital
Raising the maximum amount of share capital a company is legally permitted to issue. This is often done to accommodate future capital raising needs or new share issues.
Subdivision of
Shares
Dividing existing shares into shares of a smaller nominal value (e.g., one share of ₹100 subdivided into ten shares of ₹10 each). This can make shares more accessible.
Cancellation of Unissued Shares
Cancelling shares that have not been taken or agreed to be taken by any person. (Note: This is an alteration, not a reduction of capital as per the Act).
Conversion of Shares
into Stock
Converting fully paid-up shares into stock, or reconverting stock into shares.
Consolidation and Division of Shares
Combining existing shares into shares of a larger nominal value (e.g., ten shares of ₹10 each consolidated into one share of ₹100).
Filing with the Registrar of Companies
In less than 30 days of the resolution being passed, a company must file eForm SH-7 and eForm MGT – 14 (if applicable) along with the prescribed fees with the Registrar.
Form MGT – 14
This form has to be filed with the RoC first within 30 days of passing the respective resolution. The form is to be filed on the MCA portal, with the following details:
- Details of the company, including its CIN.
- Purpose concerning which the form is being filed.
- Date of dispatch of the notice.
- Date of passing the resolution.
- Details regarding the resolution.
- Digital Signatures and DINs wherever necessary.
The following attachments are to be provided:
- Notice of the EGM along with the Explanatory Statement as per Section 102.
- Certified copy of the resolution passed in the EGM.
- Copy of the new MOA (change made in the Capital Clause).
- Copy of the new AOA (provision for the increase in authorised share capital).
Form SH – 7
This form has to be filed with the RoC within 30 days of passing the respective resolution. The objective of this form is to intimate the Registrar regarding the details of the increase in the authorised capital. The form is be filed on the MCA portal, with the following details:
- Details of the company, including its CIN.
- Type of resolution.
- Date of the meeting.
- Service Request Number (SRN) of Form MGT – 14 already filed.
- Details regarding amount of original authorised share capital and amount of new authorised share capital.
- Details regarding the breakup of the additional share capital.
- Particulars regarding the Stamp Duty Fees paid.
- Digital Signatures and DINs wherever necessary.
The following attachments are to be provided:
- A certified true copy of the resolution for the alteration of capital.
- Copy of the new MOA (change made in the Capital Clause).
- Copy of the new AOA (in case of alteration to include provision for the increase in authorised share capital).
- Any other optional attachment, if any. The forms must be submitted within the time period stipulated in order to avoid any penalties or subsequent punishment wherein the company as well its officers will be held liable.
How Account Assure Streamlines Your Share Capital Alteration Filings:
As your trusted Financial Audit Firm, Account Assure provides end-to-end expertise to manage your share capital alteration filings seamlessly:
Expert Consultation
We analyze your specific needs and advise on the most appropriate method of share capital alteration and the precise legal requirements.
Drafting of Resolutions & Notices
Meticulous drafting of Board Resolutions, EGM Notices, and Ordinary/Special Resolutions as per the Companies Act, 2013.
Documentation & Compliance Check
- Assistance in preparing and compiling all necessary supporting documents, including altered MoA and AoA.
- Thorough review of all documents to ensure accuracy and compliance before submission.
Form Preparation & Filing
Expert preparation and accurate online submission of e-forms like MGT-14 (if applicable) and SH-7 with the Ministry of Corporate Affairs (MCA).
Liaison with Authorities
Proactive follow-up with the ROC to ensure smooth processing and approval of your filings.
Post-Filing Advisory
Guidance on updating company records, issuing new share certificates, and any other post-filing compliances.
Penalty Mitigation
Our timely and accurate services are designed to help you avoid late filing fees and penalties, protecting your company’s financial health.
Optimize Your Capital Structure, Ensure Compliance with Account Assure.
Don’t let the complexities of share capital alteration filings become a compliance burden. Partner with Account Assure for reliable, accurate, and timely services that ensure your company’s capital structure is legally sound and fully compliant. Our experienced team is dedicated to supporting your business’s evolution.
Contact us today for a consultation and secure your company’s capital future.
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