1. Board and Shareholder Approval

• The process begins with a Board Resolution approving the proposal to increase paid-up capital.
  
• If the increase requires issuing new shares beyond the existing authorized capital, the authorized capital must first be increased by amending the Memorandum of Association (MoA).
  
• A General Meeting of shareholders is then called to pass an ordinary or special resolution for approval.
  
• The company must file Form MGT-14 with the Registrar of Companies (ROC) for special resolutions.
  
• Approvals must comply with the Companies Act, 2013, and the company’s Articles of Association.
  

2. Methods of Increasing Paid-up Capital

• Rights Issue: Offering shares to existing shareholders in proportion to their current holdings.
  
• Bonus Issue: Issuing fully paid-up shares from free reserves or securities premium to shareholders without payment.
  
• Private Placement: Allotting shares to selected investors, such as institutional or strategic partners, through a special resolution.
  
• Public Issue: Raising capital by offering shares to the general public through IPO or FPO.
  
• Preferential Allotment: Issuing shares to a specific group of investors at a predetermined price.
  

3. Filing with the Registrar of Companies (ROC)

• After the allotment of new shares, the company must file Form PAS-3 (Return of Allotment) within 15 days.
  
• Details of allottees, number of shares, and share certificates issued must be included.
  
• Form SH-7 must be filed if the authorized capital is being increased.
  
• Updated details of shareholding are reflected in the company’s statutory registers.
  
• All filings must be digitally signed by authorized signatories.
  

4. Issuance of Share Certificates and Register Update

• Share certificates must be issued within two months of allotment of shares.
  
• The company must update the Register of Members and Register of Allotments accordingly.
  
• If shares are issued in dematerialized form, coordination with the depository and RTA (Registrar and Transfer Agent) is required.
  
• Allotments must be compliant with applicable SEBI regulations if the company is listed.
  
• Directors must ensure all legal, procedural, and accounting steps are fulfilled.
  

5. Post-Increase Compliance

• The increased paid-up capital must be reported in the Annual Return (Form MGT-7) and Financial Statements (Form AOC-4).
  
• Ensure entries in the Balance Sheet and Register of Members reflect the new capital structure.
  
• Listed companies must also inform the stock exchanges and publish necessary disclosures.
  
• Auditor’s certification or valuation reports may be required depending on the method of issue.
  
• The company must maintain transparency and follow all corporate governance standards.