subscription

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Jyoti Aggarwal (Querist)
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13 November 2009 A pvt. Ltd. Co. in which subscribed capital is Rs. 300000/- at the time of incorporation and there was three subscribers to the Memorandum.
One of them is not paid money at the time of allotment.

Wat should we do for his shares i.e. for 10000 shares for which his name is already mentioned in MOA and we are not getting any subscripttion money from him.

Now the queation is wat is subscribed, paid up and issued capital of the company.

Sathyaram

Sathyaram (Expert)
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14 November 2009 Hi,

Issued Capital means one which is being iisued to subsribe.

Subsribed Capital means one which has been subscribed the capital.

Paid Up Capital means one which has been paid their money for allotment and so on.

Here you keep as share allotment pending
for 10000 shares. While furnishing the subscribed capital you have show only as 300000/- minus 10000 shares of Rs.___

Jyoti Aggarwal

Jyoti Aggarwal (Querist)
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14 November 2009 Thanks for reply.

But I have a question that if we show it as share allotment pending then for later period wats the status of it?
is it always shown in bal sheet as share allotment pending as he vl never paid that money.

And also tel me that wat shuld we do for his shares i.e.10000 shares of rs. 10 each.

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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26 July 2025 Here’s a detailed explanation addressing your queries about **subscribed, paid-up, and issued capital**, and what to do with shares allotted to a subscriber who has not paid the money:

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### Definitions:

1. **Authorized Capital**: The maximum capital that the company is authorized to raise as per its Memorandum of Association (MOA).

2. **Issued Capital**: The part of authorized capital which is offered to the public or subscribers for subscription.

* If the company issued 30,000 shares of ₹10 each, issued capital = ₹3,00,000.

3. **Subscribed Capital**: The portion of issued capital that the subscribers have agreed to take.

* If all 3 subscribers agreed for shares totaling ₹3,00,000, then subscribed capital = ₹3,00,000.

4. **Paid-up Capital**: The amount of money actually received by the company against shares issued and subscribed.

* If one subscriber did not pay for 10,000 shares of ₹10 each (₹1,00,000), paid-up capital = ₹2,00,000.

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### Your Case:

* **Authorized Capital**: (say) ₹3,00,000
* **Issued Capital**: ₹3,00,000 (all shares offered)
* **Subscribed Capital**: ₹3,00,000 (all shares agreed by subscribers)
* **Paid-up Capital**: ₹2,00,000 (amount actually received; 10,000 shares unpaid)

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### Accounting and Reporting in Balance Sheet:

* Show **Paid-up Capital** as ₹2,00,000.
* Show the unpaid amount (₹1,00,000) as **“Calls in Arrears”** or **“Share Application Money Pending Allotment”** under the equity section or as a receivable.
* You **do not** increase paid-up capital until money is actually received.

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### What to do about shares of non-paying subscriber?

* **Reminder/Notice**: Send a formal notice to the subscriber to pay the amount.

* **Calls on Shares**: If the subscriber has agreed to pay later, the company may make a **call** on the unpaid shares.

* **Forfeiture of Shares**:

* If the subscriber does not pay even after calls and notices, the company can **forfeit the shares** as per **Section 56 of the Companies Act, 2013**.
* Forfeiture means the company cancels the shares, and the subscriber loses the rights as a shareholder.
* Shares may then be re-issued to recover the money.

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### Impact of Forfeiture:

* On forfeiture, the shares are treated as **not allotted** or cancelled.
* Paid-up capital reduces accordingly.
* The company can reissue these shares to new subscribers.

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### Summary Table:

| Capital Type | Amount (₹) | Explanation |
| ------------------ | ---------- | ------------------------ |
| Authorized Capital | 3,00,000 | Max. allowed by MOA |
| Issued Capital | 3,00,000 | Offered to subscribers |
| Subscribed Capital | 3,00,000 | Agreed by subscribers |
| Paid-up Capital | 2,00,000 | Amount actually received |
| Calls in Arrears | 1,00,000 | Unpaid amount |

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### Action Points for You:

1. **Send demand notice** for payment of unpaid amount.
2. If no payment after notice, proceed with **forfeiture**.
3. Reflect unpaid shares properly in the balance sheet.
4. Keep clear records to avoid legal complications.

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If you want, I can help draft a **forfeiture notice** or provide a template for recording this in your accounts. Would you like that?

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