Tuesday, September 23, 2008
What is the difference between Authorized Capital, Issued Capital, Subscribed Capital, Called-up Capital, Paid-up Capital
1. Nominal Authorized or Registered Capital
Nominal authorized or registered capital means the sum mentioned in the capital clause of Memorandum of Association (say Rs. 10,00,000/- i.e. Ten Lakhs). It is the maximum amount, which the company raises by issuing the shares and on which the registration fee is paid. This limit cannot be exceeded unless the Memorandum of Association is altered.
2. Issued capital
Issued capital means that part of the authorized capital, which has been offered for subscription to members (say Rs. 5,00,000/- i.e. Five Lakhs) and includes shares allotted to members for consideration in kind also.
3. Subscribed capital
Subscribed capital means that part of the issued capital at nominal or face value which has been subscribed or taken up by purchaser of shares in the company and which has been allotted (say Rs. 4,00,000/- i.e. Four Lakhs).
4. Called-up capital
Called-up capital means the total amount of called up capital on the shares issued and subscribed by the shareholders on capital account. i.e. if the face value of a share is Rs.10/- but the company requires only Rs.2/- at present, it may call only Rs.2/- now and the balance Rs.8/- at a later date. Rs.2/- is the called up share capital and Rs.8/- is the uncalled share capital.
5. Paid-up capital
Paid-up capital means the total amount of called up share capital, which is actually paid to the company by the members (say Rs. 3,00,000/- i.e. Three Lakhs).