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MCA new eForm SH-7

MCA new eForm SH-7

The Ministry of Corporate Affairs (MCA) notified the Companies (Share Capital and Debentures) Second Amendment Rules, 2020 which seeks to amend the Companies (Share Capital and Debentures) Rules, 2014. With this notification, MCA amended Form No. SH-7 (eForm SH-7) which pertains to notice to the registrar for alterations of share capital. The current article briefs the MCA new eForm SH-7.

Synopsis of MCA Notification

The new eForm SH-7 includes the provisions for cancellation of unused issued Shares of one class and increase in share capital. Earlier, the form SH-7 did not have any such pointers, and the company was required to attach requisite documents. Now, the revised e-form SH7 also captures the order of the tribunal (if applicable) and the date of receipt of such order.

The notification pertaining to the Companies (Share Capital and Debentures) Second Amendment Rules, 2020 is as follows:

40_19041_secondamdtrules_24122020

Laws Governing the eForm SH-7

eForm SH-7 is to be filed according to Section 64 (1) of the Companies Act, 2013 and rule 15 of Companies (Share Capital & Debentures) Rules, 2014.

Section 64 (1) of the Companies Act, 2013

Whenever a company alters its share capital/ number of members independently or increases the share capital by conversion of debentures due to the order of Central Government, then a return shall be filed with the registrar within 30 days of such alteration or increase. The return shall also be filed where the company redeems any redeemable preference shares.

Rule 15 of Companies (Share Capital & Debentures) Rules, 2014

If a company alters its share capital/ number of members independently or increases the share capital by conversion of debentures due to order of Central Government, the notice of such alteration, increase or redemption shall be filed by the company with the Registrar in Form No. SH-7 along with the fee.

Purpose of the eForm

As mentioned above, a company need to file the Notice to Registrar for any alteration of share capital):

  • Increase in share capital independently by the company
  • Increase in the number of members
  • For Increase in share capital with Central Government order
  • For Consolidation or division etc.
  • For Redemption of redeemable preference share

Documents required for eForm SH-7

To file e-Form SH-7, the company need to attach the following documents:

  • A certified true copy of the resolution for the alteration of capital is mandatory in case of an increase in share capital independently by the company.
  • Copy of order of central government is mandatory in case of increase in share capital with a central Government order.
  • Copy of the order of the tribunal is mandatory in case of an increase in share capital with the Central Government.
  • A certified true copy of board resolution authorizing redemption of redeemable preference shares is displayed and mandatory in case of redemption of redeemable preference shares.
  • An altered memorandum of association is mandatory in case of an increase in share capital independently or by order of Central Government or an increase in several members.
  • Altered articles of association are mandatory in case the same is altered.
  • Working for calculations of ratios (in case of conversions) is mandatory in case of an increase in share capital with a central government order

The time limit for filing eForm SH-7

The time limit for filing the eForm SH-7 is tabulated here for reference:

Sl.No Purpose of the form Event Date Time limit(days) for filing
1 Increase in share capital independently by the company Date of meeting entered in field 4 30 days
2 Increase in the number of members Date of meeting entered in field 4 30 days
3                     Increase in share capital with Central Government order Date of receipt of an order entered in field 5.b 30 days
4 Consolidation or division Effective date entered in field 7 30 days
5 Redemption of redeemable preference shares. The actual date of redemption entered in field 8. 30 days

Applicable Fee

The fee details for Increase the Authorized Capital of a company Independently’ or Increase the Authorized Capital of a company due to Central Government Order are tabulated here. The form filing fee rates are provided as per the Companies (Registration of Offices and Fees) Rules, 2014

Nominal Share capital Other than OPCs and Small Companies OPC and Small Companies
Fixed For every 10, 000 or part thereof Fixed For every 10, 000 or part thereof
Up to 1, 00, 000 5000 NA 2000 N/A
More than 1,00,000 up to 5,00,000 5000+ 400 2000 N/A
More than 5,00,000 up to 10,00,000 21000+ 300 2000 N/A
More than 10,00,000 up to 50,00,000 36000+ 300 2000 200
More than 50,00,000 up to 1,00,00,000 156000+ 100 N/A N/A
More than 1,00,00,000 206000+ 75 N/A N/A

Procedure for Filing of eForm SH-7

The following steps can be used for filing the eForm SH-7 on the MCA portal.

Note: Stamp duty on eForm SH-7 can be paid electronically through the MCA portal. If it is required to file eForm MGT-14 concerning the resolution passed for change in capital structure and ensures that filing of eForm MGT-14 precedes the filing of this eForm

  • After login to the portal, enter Enter a valid ‘Corporate identity number’ (CIN) for cancellation of unused issued Share of one class and increase in share capital.
  • Select the purpose of the eForm from the drop-down menu and in case of others selected, specify the entity in the description box.

Increase in share capital independently by the company.

  • Select the type of resolution and enter the date of the meeting in which the concerned resolution has been passed. Enter service request number (SRN) of eForm MGT-14
  • Provide the details for the break-up of the additional authorized capital for Equity shares and Preference shares

Increase in the number of members

  • This option is applicable only for companies not limited by shares. Select the type of resolution and
  • Furnish date of the meeting in which the concerned resolution has been passed. Enter service request number (SRN) of eForm MGT-14. Provide the details in respect of the increase in authorized share capital
  • Enter the revised number of members (total maximum number of members after increase) of the company and difference in the number of members (addition)

Increase in share capital with Central Government order

Provide the revised authorized capital (after increase) of the company and amount of difference in authorized capital (addition)

For Consolidation or division

  • Furnish the date on which the shares were consolidated or divided etc.
  • Redemption of redeemable preference shares
  • The description of preference shares to be redeemed, date of issue of series of shares, the date on which preference shares were fully paid up and its due date of redemption and other details concerning the redemption of preference shares

Payment of Stamp Duty

The system shall automatically display the amount of stamp duty to be paid on eForm SH-7 based on the state-wise stamp rules. Select whether stamp duty is to be paid electronically through MCA portal.

Declaration and Designation

  • Select any one of the options from the drop-down values for declaration and digitally sign the eForm SH-7.
    • In case the person digitally signing the eForm SH-7 is a Director, approved DIN need to be provided.
    • In case the person digitally signing the eForm SH-7 is Manager, enter approved DIN or valid income-tax PAN.
    • Membership number need to be filed, in case the person digitally signing the eForm SH-7 is Company Secretary

Upload Documents

  • By clicking on the attach button, the required document can be uploaded and click on the pay the payment button for making fee.
  • On successful submission of the eForm SH-7, the eForm will be processed by the office of Registrar of Companies.

SRN Generation

SRN will be generated and displayed to the applicant on successful submission of the eForm SH-7. This SRN will be used for future correspondence with MCA. SRN for payment of stamp duty shall also be generated if the user opts to pay the stamp duty electronically through MCA21 system in the eForm.

Challan Generation

On successful submission, a challan will be generated depicting the details of the fees paid by the user to the Ministry. It is the acknowledgement to the applicant that the eForm SH-7 has been filed.

Email

When the eForm SH-7 is completely processed by the authority, an acknowledgement will be sent to the official mail of the company.