06 June 2009
These all are classification of capital in the case of Company.Authorised capital denotes the maximum amount of capital that a company can raise by issuing shares. Subscribed capital denotes the amount of share capital accepted by the shareholders and paid up capital denotes the total amount of money deposited by the shareholders on the shares subscribed by them.
06 June 2009
authorised capital means the capital company is authorised to raise from public which is mentioned by company in its Memorandum of asso.(however it can be futher increased)
subscribed capital means total capital issue to public i.e. subscribed by public and other.
paid up cap. means the amt of capital for which consideration has been receivd by compnay
06 June 2009
The following different terms are used to denote different aspects of share capital:- 1.Nominal, authorised or registered capital means the sum mentioned in the capital clause of Memorandum of Association. It is the maximum amount which the company raise by issuing the shares and on which the registration fee is paid. This limit is cannot be exceeded unless the Memorandum of Association is altered. 2.Issued capital means that part of the authorised capital which has been offered for subscription to members and includes shares alloted to members for consideration in kind also. 3.Subscribed capital means that part of the issued capital at nominal or face value which has been subscribed or taken up by purchaser of shares in the company and which has been alloted. 4.Called-up capital means the total amount of called up capital on the shares issued and subscribed by the shareholders on capital account. I.e if the face value of a share is Rs. 10/- but the company requires only Rs. 2/- at present, it may call only Rs. 2/- now and the balance Rs.8/- at a later date. Rs. 2/- is the called up share capital and Rs. 8/- is the uncalled share capital. 5.Paid-up capital means the total amount of called up share capital which is actually paid to the company by the members. In India, there is the concept of par value of shares. Par value of shares means the face value of the shares. A share under the Companies act, can either of Rs10 or Rs100 or any other value which may be the fixed by the Memorandum of Association of the company. When the shares are issued at the price which is higher than the par value say, for example Par value is Rs10 and it is issued at Rs15 then Rs5 is the premium amount i.e, Rs10 is the par value of the shares and Rs5 is the premium. Similarily when a share is issued at an amount lower than the par value, say Rs8, in that case Rs2 is discount on shares and Rs10 will be par value.
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