Share Capital Increase & Change India: Timelines and What Drives Them
How long Share Capital Increase & Change India takes depends on a handful of things that are largely within your control. The questions below are the ones raised most often in practice; the full scope of the service is on the Share Capital Increase & Change India page.
What is the difference between authorised capital and paid-up capital, and why does it matter for a capital change?
Authorised capital is the maximum value of shares the company's Memorandum of Association permits it to issue — the ceiling. Paid-up capital is the actual value of shares issued and subscribed by shareholders at any given time — always less than or equal to authorised capital. A capital change most commonly means increasing this ceiling (via Form SH-7) so that the company can then issue more shares (via Form PAS-3) without exceeding the limit set in its MoA.
In practice: ' The two are related but not identical — you only need to increase authorised capital if the new allotment would push paid-up capital past the existing ceiling.
What is Form SH-7 and when must it be filed?
Form SH-7 is the MCA e-form used to notify the Registrar of Companies of any alteration to a company's share capital — including an increase in authorised capital, a sub-division, or a consolidation of shares. It must be filed within 30 days of the resolution (or the meeting at which it was passed) authorising the change, along with a certified copy of the resolution and the altered Memorandum of Association.
In practice: SH-7 fee is charged on the incremental authorised capital, not the total. Filing the form with the wrong base figure is a common self-filing error that leads to overpayment — we compute this precisely before filing.
What is the minimum offer period for a rights issue?
Under Section 62(1)(a)(i) and the rules made thereunder, the offer must remain open for acceptance for a period which is not less than seven days and not more than thirty days from the date of offer, unless 90% of members entitled to vote agree in writing to a shorter period. If a shareholder does not respond within this window, the Board may deal with the unsubscribed shares in a manner it considers most beneficial to the company, subject to the AoA.
In practice: The offer period is one of the details most frequently miscalculated when founders draft their own rights issue letter. We track the exact opening and closing dates and confirm the letter's language matches the statutory requirement precisely.
Is FC-GPR required if a foreign shareholder participates in a rights issue?
Yes. Any allotment of shares to a person resident outside India — whether through a rights issue, a preferential allotment, or a fresh subscription — constitutes Foreign Direct Investment (FDI) under FEMA, and Form FC-GPR must be filed on the RBI FIRMS portal within 30 days of the allotment date, regardless of the mechanism used to arrive at that allotment.
In practice: We flag this at the very first conversation whenever any shareholder in the cap table is an NRI, OCI, or foreign national — it changes the documentation and timeline requirements for the entire capital change process, not just the allotment step.
Can the authorised capital be increased and the allotment filed on the same day?
No. Form SH-7 (increasing authorised capital) must be approved by the Registrar before Form PAS-3 (return of allotment) reflecting shares that push paid-up capital past the old ceiling can be validly filed. In practice, once SH-7 is filed, approval typically comes through within a matter of days on the MCA portal, after which the allotment can proceed and PAS-3 can be filed within its own 30-day window.
In practice: We sequence this carefully for clients under time pressure from an investor's closing date — filing SH-7 promptly at the start of the process, rather than waiting, is the single biggest lever to compress the overall timeline.
Is stamp duty payable again when we increase authorised capital a second or third time?
Yes. Stamp duty on authorised capital is charged incrementally each time the authorised capital is increased, calculated on the amount of the increase (not the new total), at the rate applicable in the state of incorporation at the time of that specific increase. There is no exemption for companies that have already paid stamp duty on a previous increase.
In practice: This is exactly why we recommend setting the authorised capital thoughtfully at incorporation and at each subsequent increase — sizing it only for the immediate need, when a slightly larger increase now would avoid a second stamp-duty-bearing SH-7 filing within the same funding cycle, is a trade-off we walk through with clients explicitly.
Where this sits in the wider engagement
Share Capital Increase & Change India rarely arrives on its own. The statutory basis and the current requirements are set out on the Share Capital Increase & Change India service page, and the related services are grouped under Corporate Law.
What PNPC does
PNPC Global has practised since 1986 across India and the UAE. On Share Capital Increase & Change India we take the work end to end — reviewing the facts, preparing and filing what is required, and dealing with the authority through to closure.