Authorised & paid up capital

This query is : Resolved

Anand K (Querist)
Follow

12 September 2013 Sir, what should be the minimum Authorised & Paid-up Capital for Private Limited Company nd minimum promoter/members. Regards,

Ajay Mishra

Ajay Mishra (Expert)
Follow

12 September 2013
This clause is required to state the authorised or nominal capital with which the company having a share capital is to be registered and the division thereof into shares of a fix amount. This capital is variously described as 'registered', 'authorised' and 'nominal' capital. In this connection the authorised capital should not be less than the minimum paid-up capital required Rs. 5,00,000 for public company and Rs. 1,00,000 for private limited company.
In case of an unlimited company, the liability of the members towards the outsiders is unlimited in the event of winding up of the company, while it remains limited to the value at which the shares are subscribed by them and remain unpaid, so long as the company is a going concern. However, the same should be specifically stated in the Memorandum. The requirement of section 13(4)(a) is not mandatory in such case.

Ajay Mishra

Ajay Mishra (Expert)
Follow

12 September 2013
Requirements of minimum paid-up capital
Every private company requires minimum paid up capital of Rs. 1 lakh and public company requires minimum paid up capital of Rs. 5 lakhs. Now new company cannot be registered which is having less than the minimum paid-up capital required
However, as per section 3(6) no criteria for minimum paid up capital is applicable for the Companies registered under the provisions of section 25 of the Act. It is not stated in this provision when the new companies should issue the minimum shares after incorporation and make them paid-up to the extent required under the law. However the promoters shall undertake to subscribe in the Memorandum and Articles, the minimum amount of capital as required and should allot the same at the first Board meeting of the company.

Ajay Mishra

Ajay Mishra (Expert)
Follow

12 September 2013 (1) According to section 12, there should be at least two persons subscribing to Memorandum of Association in case of private company and seven in case of public company.
(2) The names of subscribers to Memorandum of Association must tally with the names of promoters as given in application for availability of name. (See the Circular No. 1/90, dated 5-1-1990).
(3) In case one or more of the promoters, whose name have been included in application for availability of name, are no more interested in incorporation of the Company, no-objection letter from such promoter should be obtained and made available to MCA/ROC at the time of registration of the company.
(4) The Registrars have also been told that in case if there is any change in the names of the subscribers from what was given in e-Form 1A for availability of name, the changed subscribers should be asked to make a fresh application for availability of names. However, the names in instances of the above nature will be valid for sixty days, the MCA/Registrar will have no objection to allow the said name in response to the fresh application if the name is not utilised for sixty days in terms of the original application.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok