Bringing a new partner into your Howrah company with his machinery as capital, and not sure whether that is a share transfer, an allotment or something else? It is an allotment of new shares against consideration other than cash. It has its own resolution, its own valuation requirement and a 30 day filing window that most Kolkata companies learn about after they have missed it. This page covers the ways a company's share capital changes, which filings each one needs with ROC West Bengal, what a miss costs and how we run the process.
What is a share capital change and when are the filings due?
Share capital changes in two dimensions. The authorised capital, the ceiling in the memorandum, changes through SH-7. The paid up capital, what members have actually paid for allotted shares, changes through one of these routes:
- Private placement or preferential allotment to a new or existing investor, with a special resolution, a valuation and PAS-3 within 30 days of allotment
- Rights issue to existing members in proportion, with a board resolution and PAS-3
- Bonus issue out of reserves, with a board and member resolution and PAS-3
- Conversion of a loan into equity, with a special resolution and PAS-3
- Reduction of capital, approved by the tribunal, or a buyback within the statutory limits
Every filing goes to the Registrar of Companies, West Bengal through the MCA portal with digital signatures. A company registered in the state carries WB in its CIN and answers to this registrar.
Which Kolkata companies need this?
- A Howrah manufacturer issuing shares to a partner who brings machinery or a factory shed
- A Bowbazar family company restructuring holdings between generations, or paying out a retiring member
- A Salt Lake Sector V startup closing a funding round through a preferential allotment
- A company capitalising reserves through a bonus issue before a bank appraisal
- A company converting a director's loan into equity to clean up the balance sheet
Each route has different paperwork. The mistake we correct most often is a company that treated a new investor's money as a share transfer from a founder when it was in fact a fresh allotment the company never filed.
What happens if you miss a filing?
| Filing | Window | If missed |
|---|---|---|
| SH-7, authorised capital increase | 30 days from the resolution | Additional fees per day; the ceiling is not on record |
| MGT-14, special resolution | 30 days from the resolution | Additional fees per day; the allotment rests on an unregistered resolution |
| PAS-3, return of allotment | 30 days from allotment | Additional fees per day; the shares are not on the public record |
| Share certificates | 2 months from allotment | Penalty on the company; the holder has no proof of title |
| Valuation for a private placement | Before the offer | Tax exposure for the company and investor on an underpriced issue |
The fees are modest. The real damage is an investor whose ₹2 crore is in the bank while the MCA record still shows the old capital, which is exactly the situation a later round's due diligence uncovers.
What does our process look like?
- Route and headroom: we confirm which change you are making and whether the authorised capital covers it; if not, SH-7 comes first.
- Resolutions: the board resolution and, where the route needs it, the members' special resolution are drafted and passed, and MGT-14 is filed.
- Valuation: for a private placement, a registered valuer's report sets the price before the offer letter goes out.
- Offer and money: the offer letter or rights offer is issued, subscription money lands in a separate bank account, and the board allots the shares.
- PAS-3: filed with ROC West Bengal within 30 days of allotment with the list of allottees.
- Certificates and registers: certificates are issued within 2 months, stamped at the West Bengal rate computed in advance, and the register of members is updated.
From instruction to PAS-3, 10 to 15 working days for a private placement or rights issue.
What paperwork does this need?
- Memorandum and articles, with the current authorised and paid up capital
- Register of members and the latest audited financials
- Details of the proposed allottees with PAN and address
- The consideration: cash, a loan to be converted, or an asset with its valuation
- Bank account details for the subscription money
- Directors' digital signatures
What does a share capital change cost in Kolkata?
Our professional fee starts at ₹1,999 for the resolutions, PAS-3, certificates and registers on a straightforward allotment. Government charges are paid at actuals. MCA fees on SH-7 and PAS-3 scale with the amounts, and stamp duty on the share certificates in West Bengal depends on the instrument and value, which we compute before issue. A registered valuer's report for a private placement is the main outside cost. Reductions through the tribunal and buybacks are quoted on scope because they involve hearings and creditor notices.
Which Kolkata professionals sign off on a capital change?
The directors sign the resolutions and forms, a company secretary or chartered accountant certifies the MCA filings, and for a private placement a registered valuer signs the price report. Where the change is part of an investment, a lawyer drafts the share subscription agreement behind it with Kolkata courts and an arbitration seat in the city in the dispute clause.
The registrar checks that the resolution matches the allotment, that the money came in before the shares went out, and that the authorised capital was sufficient on the allotment date. Sequencing is everything, and it is where Kolkata companies that file PAS-3 before SH-7 come unstuck.
Why choose LegalX India for capital changes in Kolkata?
This is a Kolkata firm, based at 58B, Bidhan Park, Taki Road, Barasat, Kolkata 700124, and allotments, rights issues and capital increases for companies across the city are regular work for our company secretaries. You get the route confirmed before the first resolution and the filings sequenced so nothing is filed against capital that does not exist. The valuation is arranged where the law asks for one, and certificates and registers are ready for due diligence. Fees start at ₹1,999.
If you want the all India picture on each route and the forms behind them, read share capital change in India explained. For a company registered in West Bengal, call +91 96356 85435 or request a callback and a CS maps your change to the right route within 30 minutes.