Student ID: bc220416477

Assignment No: 01
Mgt211
Question no:01
Case Alpha and Gamma are friends since their childhood. They have got the whole of their
education in every school jointly. Both of them recently graduated from a local business school
getting degrees in business management. After this graduation, they decided to start a business of
online car rental. For that purpose, they got developed a mobile application named Carg that can
be run on all Android and Apple smartphones. Further, they shared their business plan with a
professional promotor to set up a new business entity. With all the necessary documentation, the
new entity has been successfully registered on 5 th of January 2023 with the SECP as a limited
liability company in the name of Alpha Limited. It was registered with a capital of Rs. 500,000
divided into 25,000 ordinary shares of Rs. 20 each. On the 20th of January, the new company
offered 15,000 shares at par to the general public. On the 23rd of January, the company’s bank
informed it that application money for 14,500 shares had been received from the general public
in the company’s bank account. Alpha’s management allotted shares to all the applicants on the
31st of January, 2023.
You are required to identify the kinds of share capital presented in this case describing briefly
each kind. 5 x 2 = 10 Marks (2 marks for each kind)

Answer:
The following categories of capital shares can be determined in this situation based on the facts
provided:
1. Capitalised Authorised Shares:
This is the largest sum of money that a business can raise through the
issuance of shares. The largest amount of capital that the firm can raise through the issuance of
shares is Rs. 500,000 in this instance, which represents the authorized shareholding of Alpha
Limited.
2. Issued Share Capital:
This term describes the exact quantity of the number of shares that a
corporation has issued to its shareholders.
In this instance, Alpha Limited issued 25,000 people ordinary shares with a par value of Rs. 20,
for a total of Rs. 500,000.
3. Share Capital Subscribed: 
This term describes the amount of each of the total number of shares
issued that has been taken up by the shareholders. In this instance, Alpha Limited made 15,000
shares available to the public, and more than 14,500 shares' application funding was obtained.
Therefore, 14,500 shares at a price of Rs. 20 each equal 290,000 for the company's subscribed
share capital.
4. Called-up Share Capital:
The amount of the subscribed number of shares that the corporation has
asked its stockholders to pay is referred to by this term.
Since the shares were made available at par in this instance, the corporation has called up the
entire amount of the subscribed share capital.
5. Paid-up Share Capital: 
This term describes the amount of the called-up shares that the
shareholders have actually paid. Whether the stockholders have paid the called-up capital shares
or not is not stated in this instance.
However, it can be presumed that the stockholders were responsible for paying up the entire
amount of their called-up share capital because the shares were sold at par.

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