12/27/2018 (4) What is the difference between paid-up capital and authorized capital?

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Uday Kumar, studied at Bhashyam Public School, Visakhapatnam What is the difference between paid up share
capital and issued share capital?
Answered Jun 27, 2015

Authorized capital: The amount of capital with which a company is registered What is authorized, issued, subscribed and paid
up capital?
with the registrar of companies (body responsible for registration of companies).
It is the maximum amount of capital which a company can raise through shares What is paid up capital?

i.e. shared capital can be maximum up to the authorized capital and not beyond. What is paid up share capital?
Due to this reason companies are registered with such authorized capital which
What is difference between authorised capital and
is well above their current needs of financing so that if more is needed in future paid up capital?

then it is easily possible. Authorized capital is also called Registered capital or What is “paid-up capital”?
Nominal capital.
What is the meaning of minimum paid up capital?
Subscribed capital: The amount of capital (out of authorized capital) for which
company has received applications from the general public who are interested Indian Businesses: Which is better to own:
authorized share capital or paid up capital?
in buying shares. If this term is too technical to be understood then subscription
What is the difference between paid-up capital
is simply an application in which investors expresses his interest to buy shares
and subscribed capital?
in the company. Usually only that much shares are subscribed which company
What is the difference between angel capital and
intends to issue later. But sometimes, if company is in good shape then more
venture capital?
and more people will be interested in buying shares and in this case over-
subscription will be the result. But if company’s financial position is not sound
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or due to other factors it may be possible that subscriptions are received for More Related Questions

lesser then intended shares in which case there will be under-subscription.

Question Stats
Issued capital: The amount of capital (out of subscribed capital) which has
been issued by the company to the subscribers and thus are now shareholders. 71 Public Followers
Called-up capital: In some jurisdictions, company is permitted to ask for only 192,778 Views

part of the total issued capital i.e. company will require shareholders to pay only Last Asked May 29, 2017

part of the amount of the shares they hold and not to pay fully. The partial Edits

amount (out of issued capital) so asked by the company from the shareholders
out of the total value of shares is called-up capital.
Paid-up capital: The amount of capital (out of called-up capital) against which
the company has received the payments from the shareholders so far.
Example:
ABC Ltd was registered with registrar with a registered capital of Rs. 20,000,000
where each share is of Rs. 10.
In response to the advertisements made by the company to buy shares in the
company applications have been received for 1,000,000 shares but company
actually issued 700,000 shares where company has called for Rs. 8 per share.
All the calls have been met in full except three shareholders who still owe for
their 6000 shares in total.
Solution:

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12/27/2018 (4) What is the difference between paid-up capital and authorized capital? - Quora

Authorized capital = Rs. 20,000,000

Subscribed capital = 1,000,000 x Rs. 10 = Rs. 10,000,000
Issued capital = 700,000 x Rs.10 = Rs. 7,000,000
Called-up capital = 700,000 x Rs. 8 = Rs. 5,600,000
Paid-up capital = 5,600,000 – (6000 x Rs. 8 ) = Rs. 5,552,000

Source:http://pakaccountants.com/differ...
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Yashoda Bommanalli, studied at Institute of Finance and International

Management
Answered Feb 1, 2017

Hi there

Authorized Capital

It is the maximum amount of share that a company is authorized to have by its

constitutional documents to issue to the shareholders. It is not necessary to
issue the whole amount of the authorized capital, part of it can remain unissued.
The amount of share that is issued to the shareholder is called the issued share
capital of the company. To put in other words, an authorized capital is the one
which is the maximum amount of value of securities that a company can legally
issue to the shareholders. The Authorized capital needs to be specified in the
Memorandum of Association(MOA).

Authorized capital is broadly divided into the:

Issued capital, which is the per value of the share that is actually issued.

Paid up capital, which is the money received from the shareholders in

exchange of the shares.

Uncalled capital, which is the amount unpaid by the shareholders for

the share that they have bought.

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12/27/2018 (4) What is the difference between paid-up capital and authorized capital? - Quora

Paid Up Capital

It is the amount in a company which is funded by the shareholders. A paid up

capital can never be more than an authorized capital. This capital is a reflection
of how an equity funding is needed for a company to grow in the market. A
company raises its financing with the help of the paid-up capital, it can be either
in the form of Initial Public Offering(IPO) or an additional issue.

Difference between Authorized capital & Paid-up capital

A paid up capital is included in the authorized capital, the definition

itself is a difference. A Private Limited Company after its incorporation
decides the amount of authorized capital for the company and the value
of shares that they will receive in return to their investment in the
company. It is the maximum value of shares that a company can allot to
its shareholders. Whereas, a Paid up Capital is the amount of money for
which the shares were issued to the shareholder.

A paid up capital needs to be less than the authorized capital.

The authorized capital can be increased anytime with the prior

permission of the shareholders.

Hope this helps

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Prashant Narayan, SAP Director in a Fortune 500

Answered Jun 16, 2015

You could have authorized capital of 1 trillion $, but paid up capital of 1$ . As the
name suggests it is the amount of capital or equity that's paid up in cash or kind
to the issuing company.
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