Authorised capital be fully issued or be reserved

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2014 Dear Experts,

In a newly incorporated Private Limited Company, the minimum authorised/paid-up Share Capital is One lakh.

Whether the said entire authorised/paid-up Capital of one lakh Capital should be shown as paid-up Capital by the Directors of the company or it may be reserved as "Paid-up capital" and "Unpaid/Reserved Capital" and in due course of time the said "Unpaid/Reserved Capital" be issued among the Directors.

Furthermore, Liabilities of the Company be Limited with the paid-up share capital of the Directors or it is limitless irrespective of shares holding in the Company.

Kindly clarify these aspects.

Thanking you, in advance.

Ankur Garg

Ankur Garg (Expert)
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15 July 2014 Law has prescribed that minimum paid-up Share Capital is one lakh which means minimum authorised Share Capital will also be Rs. One lakh, since paid up capital cannot be more than Authorised capital.

This capital of Rs. 1 Lac is to be contributed by the first subscribers as per their commitment in MOA. This amount should be there in newly opened bank account of the company. This amount is not required to be reversed.

Thanks