Avinash (Student) (91 Points)
12 October 2010Hello, I have some doubts regarding Authorised and Paid-up Capital. A Pvt Ltd Company has an authorised capital of 10 lacs and paid-up capital of 1 lac.
1) Now, if the company takes a loan from a Bank, say about 5 lacs, then will the paid-up capital increase?
2) Also, if the company takes a loan from a bank exceeding 10 lacs, should the company increase its authorised capital or can it still continue with the 10 lacs authorised capital?
CS Mayur Buha
(Company Secretary)
(238 Points)
Replied 12 October 2010
My dear frd.
Share capital and loan both are separate and it is disclosed in B/S. separately. The company can avail the loan facility from bank subject to restriction imposed under the Companies Act, 1956. The paid-up capital remains Rs. 1,00,000/- it does not increase.
Loans and Share Capital doesn't have direct nexus.
CAclubindia
