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Explain me please

ramj (student) (34 Points)

05 October 2011

What is the difference between Authorized capital, Issued capital, Subscribed capital, Called-up capital and Paid-up capital?

can you please also give me a example................

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Suresh G (Final Student) (272 Points)
Replied 05 October 2011

What is the difference between Authorized capital, Issued capital, Subscribed capital, Called-up capital and Paid-up capital?

can you please also give me a example................

The authorised capital of a company (sometimes referred to as the nominal capital, particularly in the United States) is the maximum amount of share capital that the company is authorised by its constitutional documents (Articles/Memorandum/Legal Authority) to issue to shareholders. Part of the authorised capital can (and frequently does) remain unissued.

For Eg. Company A Ltd is Authorized for a Capital of 10 Crore.

The Issued Capital is that part of Authorised Share Capital which is issued to share holders by the Company.

For Eg. Company A Ltd Issued 6 Crore of Share Capital in the form of Shares in IPO.

The Subscribed Capital is that part of Issued Capital which is Actually Subscribed by the willing Share holders.

For Eg. Share holders subscribed for 5.5 Crores out of Issued Capital of 6 Crores.

The Called up Capital is the part of Subscribed Capital which is Called Money in the form of Application&Allotment/First/Second calls etc.

For Eg. A Ltd May call for Aplication/Allotment/First Call which is 70 Rs./Share

The Paid up Capital is that part of Called up Capital which is actually paid by the share holders against the shares.

For Eg. Share holders of A Ltd have paid 50 Rs/Share for Application&Allotment/First Call money etc.

Thank you,

suresh.

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Devendra (Chartered Accountant) (4775 Points)
Replied 05 October 2011

Authorised Capital

The maximum amount of capital which can be issued to the shareholders is called as Authorised Capital. Authorised Capital is also known as Nominal Capital.

Issued Capital

The amount of capital issued to the public is called as Issued Capital.

Subscribed Capital

The part of the issued capital which has been subscribed by the public is called as Subscribed Capital.

Called Up Capital

The total amount of issued capital for which the shareholders are required to pay, this may be less than the subscribed capital as the company may ask the shareholders to pay by installments.

Paid Up Capital

The amount of share capital paid by the share holders is called Paid Up Capital. This may be less than the called up capital as payments may be in arrears.

Regards,

Devendra K