Rules explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Companies (Share Capital and Debentures) Rules, 2014 deal with the types of shares and debentures a company can issue and how it manages them: differential rights, share certificates, sweat equity, preference shares, ESOPs, preferential allotment, bonus shares, buy-back, debentures and nomination. Rules 1 to 3 give the title, definitions and scope, and rule 15 requires a notice to the Registrar in Form SH-7 when capital is altered.
This article is as amended up to G.S.R. 43(E) dated 21 January 2023 per the MCA e-book. Later amendments should be checked. To increase authorised capital, see our increase of authorised capital service.
The Rules came into force on 1 April 2014 (G.S.R. 265(E)). They apply to all unlisted public companies, all private companies, and listed companies so far as they do not contradict or conflict with any SEBI regulation. Rule 15 requires a notice in Form SH-7, with the fee, to the Registrar when a company alters capital under section 61(1), when a Government order increases authorised capital, on redemption of redeemable preference shares, or when a company without share capital increases its members.
Rule 1: title and commencement
The notification is G.S.R. 265(E) of 31 March 2014. It was made under a long list of sections of the Act: clause (a)(ii) of section 43; section 54(1)(d); sections 55(2), 56(1), 56(3), 62(1), 42(2); section 63(2)(f); sections 64(1), 67(3)(b); sections 68(2), (6), (9) and (10); sections 71(3), (6) and (13); and sections 72(1) and (2); read with section 469, and in supersession of the Companies (Central Government's) General Rules and Forms, 1956 or any other relevant rules under the Companies Act, 1956 on matters covered. The 1956 Act reference is quoted as printed; check current law. The Rules may be called the Companies (Share Capital and Debentures) Rules, 2014 and came into force on the 1st day of April, 2014.
Rule 2: definitions
| Clause | Term | Meaning |
|---|---|---|
| (a) | Act | The Companies Act, 2013 (18 of 2013) |
| (b) | Annexure | The Annexure to these rules |
| (c) | Fees | The fees specified in the Companies (Registration offices and fees) Rules, 2014 |
| (d) | Form or e-form | A form set forth in the Annexure, to be used for the matter to which it relates |
| (e) | Regional Director | The person appointed by the Central Government in the Ministry of Corporate Affairs as a Regional Director |
| (f) | section | A section of the Act |
Rule 2(2) takes undefined words from the Act or the Companies (Specification of definitions details) Rules, 2014; see our article on rules 1 and 2 of those Rules.
Rule 3: who the Rules apply to
The Rules apply to (a) all unlisted public companies; (b) all private companies; and (c) listed companies so far as they do not contradict or conflict with any other regulation framed in this regard by the Securities and Exchange Board of India. Rule 3 was substituted by the Amendment Rules, 2015 of 18 March 2015; the earlier wording in the notes ("any other provision") is not the rule today.
For a listed company, the test in the rule is whether the Rules "contradict or conflict" with a SEBI regulation framed on the point. The Rules do not name any SEBI regulation, so a listed company checks the current SEBI regulations for each point.
Rule 15: notice to the Registrar for alteration of share capital
Rule 15 provides that where:
- a company alters its share capital in any manner specified in sub-section (1) of section 61; or
- an order is passed by the Government increasing the authorised capital of the company under sub-section (4) read with sub-section (6) of section 62; or
- a company redeems any redeemable preference shares; or
- a company not having share capital increases the number of its members (inserted by the Third Amendment Rules, 2016 of 19 July 2016),
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.
The rule prints no period for the filing and no fee amount. Check section 64 of the Act for the time limit; our section 64 guide covers it. For the fee see our Rule 12 fee article.
Form SH-7 was substituted by G.S.R. 794(E) of 24 December 2020; that is a form-only change. Our posts on how to file SH-7 for an increase in authorised capital and the section 61 guide on alteration of share capital cover the practice.
Example: Prism Retail Private Limited alters its share capital in a manner specified in section 61(1) and, separately, redeems a block of redeemable preference shares. Each of the two events is notified to the Registrar in Form SH-7 with the fee, as rule 15 requires. A company without share capital that increases its members also files SH-7.
A map of the Rules
| Rule | Subject | Article in this series |
|---|---|---|
| 1 to 3, 15 | Title, definitions, application, SH-7 | This article |
| 4 | Equity shares with differential rights | Article 032 |
| 5 and 7 | Share certificates and the safe custody of forms | Article 033 |
| 6 and 11 | Renewed and duplicate certificates; instrument of transfer | Article 034 |
| 8 | Sweat equity shares | Article 035 |
| 9 | Issue and redemption of preference shares | Own live post: rule 9 and the SH-7 filing |
| 10, 12A, 14 | Infrastructure preference shares; rights offer notice; bonus | Article 036 |
| 12 | Employee stock options | Article 037 |
| 13 | Preferential allotment | Article 038 |
| 16 | Money for employees' purchase of shares | Article 039 |
| 17 | Buy-back | Article 040 |
| 18 | Debentures | Articles 041 and 042 |
| 19 | Nomination by securities holders | Article 043 |
The dematerialisation rules 9A and 9B sit in the Prospectus and Allotment Rules, not here; see our posts on rule 9A and rule 9B. For an overview of the whole set, see our Share Capital Rules guide.
Need help with changes in capital?
Each alteration, redemption or increase has its own resolution and filing. TaxClue can prepare the resolution, the SH-7 notice and the related filings; see our increase of authorised capital page.
Key takeaways
- The Rules came into force on 1 April 2014 and apply to unlisted public companies, private companies and, without conflict with SEBI regulations, listed companies.
- Rule 15 requires an SH-7 notice for alteration of share capital under section 61(1), a Government order increasing authorised capital, redemption of redeemable preference shares and an increase of members of a company without share capital.
- The rule prints no filing period and no fee amount.
- Form SH-7 was substituted by G.S.R. 794(E) of 24 December 2020.
- Rule 9 has its own live post.
Read next
- Rule 4: equity shares with differential voting rights
- Rule 13: preferential allotment
- Companies Share Capital Rules, 2014: guide
- Section 61 of the Companies Act, 2013: alteration of share capital
Disclaimer: Based on the Companies Act, 2013 rules named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.