Form SH-7 is a significant form as per the Companies Act, 2013, particularly when any modification in the share capital of the company is to be made. This includes any increase in the authorised share capital, consolidation or sub-division of shares or changes with respect to the shareholding pattern of the company. The legal procedure regarding the filing of Form SH-7 is regulated by statutory timelines, and hence, it is important for companies to strictly follow deadlines.
In this blog, we are going to discuss the due date for submission of Form SH-7, the statutory ground for it, and the penalties for not filing it on time.
Introduction
Every company doing business in India is regulated by the Companies Act, 2013, and is liable to comply with different mandates of compliance. One of them is Form SH-7, which is to be filed with the Registrar of Companies (RoC) when there is a change in the share capital. Whether it is increasing the authorized capital in order to raise money or any alteration in its shareholding structure, this form is the document of the change. Filing this form within the time limit is not only legally mandatory but also necessary for upholding the standards of corporate governance.
The Ministry of Corporate Affairs (MCA) has established a framework under which alterations in share capital should be reported, and SH-7 is the prescribed medium. Non-compliance with this directive may result in monetary penalties and other legal consequences.
When is SH-7 Needed?
SH-7 form needs to be submitted in a number of specific cases, including-
- Increase in authorized share capital.
- Consolidation or subdivision of shares.
- Conversion of the shares into stock or vice versa.
- Cancellation of unissued shares.
- Alteration of share capital in any form under Section 61 of the Companies Act, 2013.
These activities must be duly authorized by the company’s Articles of Association and approved by shareholders in the form of a general meeting resolution.
Due Date for Submission of Form SH-7
According to Rule 15 of the Companies (Share Capital and Debentures) Rules, 2014, read with Section 64 of the Companies Act, 2013, Form SH-7 shall be filed within 30 days from the date on which the resolution for authorizing the alteration of the share capital has been passed.
This implies that as soon as the change is approved in a general meeting by the shareholders or the Board of Directors passes a resolution (as the case may be), the clock begins ticking. The company has to prepare and file the form with the required documents and stipulated fees within the 30-day period.
This period is not flexible and is applicable to all types of companies such as private limited, public limited, and even sole proprietorship companies in which such adjustments are permitted.
Documents Needed for SH-7 Filing
Though the documents may differ depending on the nature of the share capital variation, documents typically needed include-
- Board or Shareholders’ Resolution certified copy.
- Modified Memorandum of Association (MoA).
- General Meeting Notice (where necessary).
- Minutes of the Meeting.
- Modified share capital structure.
- Government filing fees according to authorised increase in capital.
Every document shall be correct and as per the regulatory format to prevent rejection or resubmission by the Registrar of Companies.
Late Filing and Penalties
In case a company does not file Form SH-7 within the prescribed 30 days, it will have to pay extra fees depending on the delay. According to the Companies (Registration Offices and Fees) Rules, 2014, the delay can result in a graded increase in the additional fee, depending on the lateness of the filing.
For example, a delay of 30 days or less may incur additional charges of two times the usual filing charges, whereas delays of longer duration can substantially escalate the cost. Repeated defaults may also call for officers-in-default penalties and, in exceptional cases, initiate disqualification or inspection proceedings by the MCA.
Therefore, timely filing is not just a best practice it’s a requirement under law with direct consequences for the company and its directors.
Tips for Compliance
To ensure that the SH-7 deadline is not missed, companies need to
- Keep a calendar of statutory filings for this form.
- Obtain legal or professional advice prior to changing share capital.
- Prepare the shareholder resolutions and accompanying documents in advance.
- Verify that the company’s Articles of Association allow the proposed changes.
Conclusion
Form SH-7 is not merely a procedural formality; it is a necessary step toward transparency and legality regarding a company’s share capital. Under Indian law, the deadline for filing the form is clearly outlined: 30 days from the date of the resolution sanctioning the alteration. Failure to do so within this time can lead to unnecessary financial and legal issues.
Statutory compliance discipline is mandatory for small companies, startups and large corporations. By being informed and proactive in these fields, companies can prevent penalties and ensure a robust legal position in the eyes of investors and regulators.
Reference
The Companies (Share Capital and Debentures) Rules, 2014
The Companies Act, 2013
