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Query regarding Minimum Authorised Share Capital

Shakti (Trainer) (46 Points)

28 October 2009

Dear All

We want to form a Pvt Ltd company with two Directors.

My question is naive since I have no clues about the minimum authorise share capital.

If I want to form a company then :

Do I need to have 5 lacs in the bank before applying for it or is there any % of the required amount to be kept in the bank
If it is required that I have to show 5 lacs deposited in the bank, then would the 2 directors need to have 5 lacs each or is for both.

As I said, it is naive but I would appreciate if anyone can clarify this for me.

Thanks in advance

Shakti

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4 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 29 October 2009

Hi,

In law minimum paid up capital is specified.

For Private company minimum paid up capital is Rs. 1 Lakh. For Public company minimum paid up capital is Rs. 5 Laks.

Since paid up capital can not be more then authorised capital hence you can take Rs. 1 and 5 lakhs as minimum authorised capital respectively. However there is no upper limit on authorised capital.

Revert for further query.

Regards

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Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 29 October 2009

Please go through the link below for incorporation of company:

PROCEDURES FOR INCORPORATION AND REGISTRATION OF COMPANIES

1 Like

Ajay Mishra (Company Secretary) (74337 Points)
Replied 29 October 2009

Dear Shakti

For the formation of new company, there is no need to have any amount in bank for share capital for the new company. For incorporating new company, there is requirement for promoter to subscribe share capital of the company, if company limited by shares, the minimum paid up capital subscribed by promotes is Rs. 1 lac which will be divided between promoters (subscribers) in any proportionate, in case of public company the paid up capital should be Rs. 5 lac. As per your quires, I think there is no need to have a fixed amount in bank for such purpose. I will suggest you that after incorporation of new company you can open a bank account in the name of company and deposit the amount as per your subscripttion amount (no of shares taken).

Regards

Shakti (Trainer) (46 Points)
Replied 29 October 2009

Originally posted by :Ajay Mishra
"	Dear Shakti For the formation of new company, there is no need to have any amount in bank for share capital for the new company. For incorporating new company, there is requirement for promoter to subscribe share capital of the company, if company limited by shares, the minimum paid up capital subscribed by promotes is Rs. 1 lac which will be divided between promoters (subscribers) in any proportionate, in case of public company the paid up capital should be Rs. 5 lac. As per your quires, I think there is no need to have a fixed amount in bank for such purpose. I will suggest you that after incorporation of new company you can open a bank account in the name of company and deposit the amount as per your subscriptttion amount (no of shares taken). Regards	"