Answer Posted / h.r. sreepada bhagi
Different terminologies are used to refer capital in a
company/corporation & it would be better to understand all
these together :-
Authorised Capital - The maximum amount of capital that a
company can raise from the subscribers by way of Equity or
Preference Shares. This the amount arrived at by multiplying
the maximum No. of Shares registered with the appropriate
authority (In India ROC)under the relevant Act (In India The
Companies Act, 1956)by the Nominal value (Face Value or Par
Value) of each share. Eg. 100000 Shares of Rs./$ 10/- each.
The authorised capital can be increased by a company by
making application and paying the requisite fees in the
manner prescribed in the applicable Law in a country.
Issued Capital : Is that portion of the Authorised Capital,
which has been issued to public/promoters for subscription.
Eg.50000 Shares are issued out of 100000 authorised shares
mentioned above. Depending on the requirement for money, a
company can issue the shares at any time by following due
procedures up to the maximum of Authorised Shares.
Called-up Capital : Is that portion of the nominal value of
shares called by the company to pay. Eg. Company has called
for the subscribers to pay 50% of the nominal capital
issued, i.e. Rs./$ 5/- per share. The Balance can be called
any time for payment by the subscribers in one installment
or more.
Paid-up Capital : Is that portion of the called up capital
actually paid by the subscribers to the company which has
issued the shares. Eg. Rs./$ 5/- has been received on 48000
shares & No amount has been received on 2000 shares -
Paid-up capital is Rs./$ 240000/-
Refer Memorandum & Articles of Association for more info.
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