Background

Section 64 of the Companies Act, read with Rule 15 of the Companies (Share Capital and Debentures) Rules, 2014, establishes the statutory framework for notifying the Registrar of Companies (RoC) about alterations in share capital. This provision ensures regulatory oversight and maintains accurate public records of changes in a company’s capital structure, which is fundamental to corporate transparency and stakeholder protection.

The obligation to file notice arises in the following circumstances:

1. Alterations under Section 61(1)

When a company alters its share capital in any of the following manners:

a) Increase in Authorized Share Capital

b) Consolidation and Division of Shares

c) Conversion of Shares into Stock

d) Sub-division of Shares

e) Cancellation of Unsubscribed Share (This is NOT deemed to be reduction of share capital under Section 61(2))

     2. Government Order for Increasing Authorized Capital

When an order passed by the Government under Section 62(4) read with Section 62(6) has the effect of increasing the authorized capital of a company.

     3. Redemption of Redeemable Preference Shares

When a company redeems any redeemable preference shares in accordance with applicable provisions.

     4. Increase in Number of Members (Companies without Share Capital)

For companies not having share capital, when there is an increase in the number of members.

Filing Requirements for Alteration of Share Capital

Form to be Filed: Form No. SH-7 (as prescribed under Rule 15)

Documents to be Filed:

• • Notice in prescribed Form SH-7
  • Altered Memorandum of Association
  • Requisite filing fee

Timeline for Filing

Notice must be filed with the Registrar within 30 days of:

• • The alteration of share capital, or
  • The increase of authorized capital through Government order, or
  • The redemption of redeemable preference shares, or
  • The increase in number of members (for non-share capital companies)

Contents of Form SH-7

The form typically requires disclosure of:

• • Corporate Identification Number (CIN) and company details
  • Type of alteration/change
  • Details of existing capital structure
  • Details of altered/increased capital structure
  • Date of resolution/event triggering the change
  • Details of altered memorandum
  • Declaration and certification by authorized signatory

Penalty & Punishment

• Failure to file notice within prescribed 30-day period constitutes default under Section 64(2).
• For non-compliance, company and every officer who is in default shall be liable to a penalty of Rs. 500/- for each day of default subject to a maximum of Rs. 5 lakh in case of a company and Rs. 1 lakh in case of an officer who is in default.