12/18/2018 What is the difference between paid-up capital and authorized capital?

- Quora

Search for questions, people, and topics Ask New Question Sign In

Quora uses cookies to improve your experience. Read more 

Related Questions

Share Capital Finance in India Venture Capital Funding Capital (economics) Funding What is paid up capital?

The Economy The Economy of India Venture Capital Finance India What is the difference between paid up share
capital and issued share capital?
What is the difference between paid-up capital and
What is difference between authorised capital and
authorized capital? paid up capital?

What is authorized, issued, subscribed and paid

Ad by Founder Friendly Standard
up capital?
Are there any standard contract templates that investors and founders can
use for startup funding? What is paid up share capital?

Yes. After learning hard lessons about the tension between investors and Indian Businesses: Which is better to own:
founders, I teamed up with my former business partner, Dan Flanegan, and my authorized share capital or paid up capital?

attorney, K. Adam Bloom, to ... (Continue Reading) What is the meaning of minimum paid up capital?

How much is the paid-up capital?

23 Answers
What is authorized capital and why it is
Yashoda Bommanalli, studied at Institute of Finance and International necessary?
Management
What is the difference between market capital and
Answered Feb 1 2017 · Author has 76 answers and 258.1k answer views
paid up capital?
Hi there
 Ask New Question
Authorized Capital

It is the maximum amount of share that a company is authorized to have by its

constitutional documents to issue to the shareholders. It is not necessary to
issue the whole amount of the authorized capital, part of it can remain unissued.
The amount of share that is issued to the shareholder is called the issued share
capital of the company. To put in other words, an authorized capital is the one
which is the maximum amount of value of securities that a company can legally
issue to the shareholders. The Authorized capital needs to be specified in the
Memorandum of Association(MOA).

Authorized capital is broadly divided into the:

Issued capital, which is the per value of the share that is actually issued.

Paid up capital, which is the money received from the shareholders in

exchange of the shares.

Uncalled capital, which is the amount unpaid by the shareholders for

the share that they have bought.

Paid Up Capital

It is the amount in a company which is funded by the shareholders. A paid up

capital can never be more than an authorized capital. This capital is a reflection
of how an equity funding is needed for a company to grow in the market. A
company raises its financing with the help of the paid-up capital, it can be either
in the form of Initial Public Offering(IPO) or an additional issue.

Difference between Authorized capital & Paid-up capital

A paid up capital is included in the authorized capital, the definition

itself is a difference. A Private Limited Company after its incorporation
decides the amount of authorized capital for the company and the value
of shares that they will receive in return to their investment in the
 Still have a question? Ask your own!
company. It is the maximum value of shares that a company can allot to
What is your question? Ask

https://www.quora.com/What-is-the-difference-between-paid-up-capital-and-authorized-capital 1/6
12/18/2018 What is the difference between paid-up capital and authorized capital? - Quora

its shareholders. Whereas, a Paid up Capital is the amount of money for

Search for questions, people, and topics Ask New Question Sign In
which the shares were issued to the shareholder.

A paid up capital needs to be less than the authorized capital.

Related Questions
The authorized capital can be increased anytime with the prior
What is paid up capital?
permission of the shareholders.
What is the difference between paid up share
Hope this helps capital and issued share capital?

53.4k Views · View 68 Upvoters · View Sharers What is difference between authorised capital and
paid up capital?

Sponsored by Zoho What is authorized, issued, subscribed and paid

Run your entire business with Zoho One. up capital?

Reach customers, grow sales, balance your books and work in collaboration What is paid up share capital?
from any device.
Indian Businesses: Which is better to own:
Sign up at zoho.com authorized share capital or paid up capital?

What is the meaning of minimum paid up capital?

Related Questions More Answers Below
How much is the paid-up capital?

What is paid up capital? What is authorized capital and why it is

necessary?
What is the difference between paid up share capital and issued share capital?

What is difference between authorised capital and paid up capital? What is the difference between market capital and
paid up capital?
What is authorized, issued, subscribed and paid up capital?
 Ask New Question
What is paid up share capital?

 Ask New Question

Amruta Deshpande, studied at The Institute of Company Secretaries of India

Updated May 9, 2015

A company has to mention all the details regarding its capital structure while
incorporation in its memorandum of association(MOA), under the head capital
clause.
AUTHORIZED CAPITAL:
Now while filing the MOA with the registrar of companies the company has to
mention the maximum amount of capital the company intends to raise/issue or
the company can legally raise/issue from shareholders i.e the authorized capital.
Beyond this limit the company cannot raise its capital.This applies to both
private and public companies.
Beyond this limit the capital cannot be brought in the company unless the
capital clause is altered according to provisions of companies act.
ISSUED CAPITAL (or PAID-UP CAPITAL):
On the other hand an issued capital which also needs to be mentioned under the
capital clause in the MOA is that capital of the company which is issued by the
company to its shareholders. This issued capital is within the limits of the
authorized capital. The issued capital may be less than or equal to authorized
capital. Issued capital is a part of authorized capital which is issued to public or
anybody in case of both private and public companies.

Say for example a company "xyz" while incorporation has filed its MOA with
registrar and has mentioned 1 crore as its authorized capital under capital
clause. Now a company can only issue shares or raise capital from its
shareholders to the limit of 1 crore or equal to 1 crore and not beyond that until
the capital clause is altered according to the provisions.

62.2k Views · View 49 Upvoters

 Still
Yourhave a question?
feedback is private.Ask your own!

Is this answer still relevant and up to date? Yes No

What is your question? Ask

https://www.quora.com/What-is-the-difference-between-paid-up-capital-and-authorized-capital 2/6
12/18/2018 What is the difference between paid-up capital and authorized capital? - Quora

Search for questions, people, and topics Ask New Question Sign In
Kiran Castelino, Minimalist
Answered May 7, 2015

When a company is created, it is decided at the begining how much the Related Questions
authorised capital will be. For example 1000 shares which is decided by and
What is paid up capital?
belong to the original owners.
When the time comes to raise money using these shares, the company might What is the difference between paid up share
capital and issued share capital?
only release 700 and if sold, this becomes the paid up capital. The company can
What is difference between authorised capital and
further raise capital up to 1000 shares and beyond that, if more capital needs to
paid up capital?
be raised, a vote will have to be taken by all shareholders who have voting rights.
What is authorized, issued, subscribed and paid
This has implications for the shareholders who might not want to dilute their
up capital?
equity as they will have to share their piece of the pie with more buyers (ie.
What is paid up share capital?
receive a lower dividend).
Indian Businesses: Which is better to own:
37.2k Views · View 24 Upvoters · View Sharers
authorized share capital or paid up capital?

Your feedback is private. What is the meaning of minimum paid up capital?

Is this answer still relevant and up to date? Yes No

How much is the paid-up capital?

What is authorized capital and why it is

necessary?
Sponsored by DSP
Mutual fund investing made as easy as buying movie tickets. What is the difference between market capital and
paid up capital?
Invest online with DSP. Start SIP or purchase by just entering your PAN & date of
birth.  Ask New Question
Learn more at invest.dspim.com

Prashant Narayan, SAP Director in a Fortune 500

Answered Jun 16, 2015

You could have authorized capital of 1 trillion $, but paid up capital of 1$ . As the
name suggests it is the amount of capital or equity that's paid up in cash or kind
to the issuing company.

2.3k Views · View 1 Upvoter

Uday Kumar, studied at Bhashyam Public School, Visakhapatnam

Answered Jun 27, 2015

Authorized capital: The amount of capital with which a company is registered

with the registrar of companies (body responsible for registration of companies).
It is the maximum amount of capital which a company can raise through shares
i.e. shared capital can be maximum up to the authorized capital and not beyond.
Due to this reason companies are registered with such authorized capital which
is well above their current needs of financing so that if more is needed in future
then it is easily possible. Authorized capital is also called Registered capital or
Nominal capital.
Subscribed capital: The amount of capital (out of authorized capital) for which
company has received applications from the general public who are interested
in buying shares. If this term is too technical to be understood then subscription
is simply an application in which investors expresses his interest to buy shares
in the company. Usually only that much shares are subscribed which company
intends to issue later. But sometimes, if company is in good shape then more
and more people will be interested in buying shares and in this case over-
subscription will be the result. But if company’s financial position is not sound
or due to other factors it may be possible that subscriptions are received for
lesser then intended shares in which case there will be under-subscription.
Issued capital: The amount of capital (out of subscribed capital) which has
 Still have a question? Ask your own!
been issued by the company to the subscribers and thus are now shareholders.
What iscapital:
Called-up your question? Ask
In some jurisdictions, company is permitted to ask for only

https://www.quora.com/What-is-the-difference-between-paid-up-capital-and-authorized-capital 3/6
12/18/2018 What is the difference between paid-up capital and authorized capital? - Quora

part of the total issued capital i.e. company will require shareholders to pay only
Search for questions, people, and topics Ask New Question Sign In
part of the amount of the shares they hold and not to pay fully. The partial
amount (out of issued capital) so asked by the company from the shareholders
out of the total value of shares is called-up capital. Related Questions

Paid-up capital: The amount of capital (out of called-up capital) against which
What is paid up capital?
the company has received the payments from the shareholders so far.
What is the difference between paid up share
Example:
capital and issued share capital?
ABC Ltd was registered with registrar with a registered capital of Rs. 20,000,000
What is difference between authorised capital and
where each share is of Rs. 10. paid up capital?
In response to the advertisements made by the company to buy shares in the
What is authorized, issued, subscribed and paid
company applications have been received for 1,000,000 shares but company up capital?
actually issued 700,000 shares where company has called for Rs. 8 per share.
What is paid up share capital?
All the calls have been met in full except three shareholders who still owe for
Indian Businesses: Which is better to own:
their 6000 shares in total.
authorized share capital or paid up capital?
Solution:
What is the meaning of minimum paid up capital?
Authorized capital = Rs. 20,000,000
Subscribed capital = 1,000,000 x Rs. 10 = Rs. 10,000,000 How much is the paid-up capital?

Issued capital = 700,000 x Rs.10 = Rs. 7,000,000 What is authorized capital and why it is
Called-up capital = 700,000 x Rs. 8 = Rs. 5,600,000 necessary?

Paid-up capital = 5,600,000 – (6000 x Rs. 8 ) = Rs. 5,552,000 What is the difference between market capital and
paid up capital?

Source:http://pakaccountants.com/differ...  Ask New Question

36.4k Views · View 73 Upvoters · View Sharers

Saurabh P.S. Chauhan, Wanderer

Answered Jun 26, 2012 · Author has 868 answers and 1.6m answer views

Think of authorized capital as the overall cap on the total number of shares you
may potentially issue (as fixed by your own constitution docs) viz. a company
may be authorised to issue 10 billion shares. Potential capacity.

Paid-up capital (irritatingly also called issued and fully paid-up capital) means
the number of shares that have been issued and actually paid for by
shareholders. 5 of those of those 10 billion shares. Your capital structure will
only comprise your paid-up capital i.e., 5 shares.

Paid up capital will always be a sub-set of authorised capital.

42.2k Views · View 6 Upvoters

Hasmita Hassi, MBA(FINANCE) from Andhra University

Answered Sep 23, 2016

CONCEPT OF CAPITAL

the term capital has different meanings for different purposes in companies
point of view capital means share capital for the companies Ltd by shares for

AUTHORISED CAPITAL/REGISTERED CAPITAL/NOMINAL CAPITAL

the amount of capital which is mentioned in capital clause of

memorandum is called authorised capital

it is the maximum capital that can be issued by the company to the

shareholders

the company can't issue capital more than its authorised capital if it
requires more capital than its authorised capital first it has to increase
 Still have a question? Ask your own!
the limit of authorised capital by altering the capital clause u/s 61 ,64
What is your question? Ask

https://www.quora.com/What-is-the-difference-between-paid-up-capital-and-authorized-capital 4/6
12/18/2018 What is the difference between paid-up capital and authorized capital? - Quora

the stamp duty will be paid on authorised capital of the company only
Search for questions, people, and topics Ask New Question Sign In
whether it is at time of incorporation or at time of increasing authorised
capital
Related Questions
PAID UP CAPITAL
What is paid up capital?
it is the part of the total called up capital which is actually paid by
What is the difference between paid up share
shareholders capital and issued share capital?

it can be arrived at by deducting the calls in arrears from the called up What is difference between authorised capital and
paid up capital?
capital

4.1k Views · View 2 Upvoters · Answer requested by Rajendranath Mohite What is authorized, issued, subscribed and paid
up capital?

What is paid up share capital?

Jagmohan, lived in India (2010-2018)
Answered Jul 27, 2017 · Author has 212 answers and 81.1k answer views Indian Businesses: Which is better to own:
authorized share capital or paid up capital?
The total amount of funds the company raises in exchange for its shares is called
share capital. The amount of share capital includes both preference share What is the meaning of minimum paid up capital?

capital and equity share capital. The share capital of a company can change over How much is the paid-up capital?
time. A company that wishes to raise more equity can obtain authorization to
What is authorized capital and why it is
issue and sell additional shares, thereby increasing its share capital. necessary?

What is the difference between market capital and

Authorized Share capital
paid up capital?

Authorized share capital is the maximum amount of share capital that a  Ask New Question
company is authorized to issue to the shareholders. Every form of the company
like the private limited company , one person company or limited company
is required to file the amount of authorized share capital in the memorandum of
association. The company is not required to issue the whole amount of the
authorized capital, part of it can remain unissued. The amount of share that is
issued to the shareholder is called the issued share capital of the company .

Basically, an authorized capital is the maximum amount of securities that a

company can legally issue to the shareholders.

Authorized capital is broadly divided into the:

• Issued capital

• Paid up capital

• Uncalled capital

Paid up Share capital

Paid up share capital is the part of authorized share capital that is funded by the
shareholders. The amount of paid up capital can never exceed the amount of
Authorized share capital. A company raises its finances with the help of the
paid-up capital, it can be either in the form of Initial Public Offering (IPO) or an
additional issue.

Earlier all private companies required minimum paid up capital of Rs.1 lakh to
start their business but with the Companies Amendment Act, 2015 the
minimum requirement for paid up capital was removed. Therefore, there is now
no requirement for any minimum capital to be invested to start a private
limited company.

Difference between paid up share capital and authorized share capital

The basic difference between the authorized share capital and paid up share
 Still have a question? Ask your own!
capital is that the authorized share capital is the maximum value of shares that a
company can
What is allotquestion?
your to its shareholders. Whereas, a Paid up Capital is the part
Ask of

https://www.quora.com/What-is-the-difference-between-paid-up-capital-and-authorized-capital 5/6
12/18/2018 What is the difference between paid-up capital and authorized capital? - Quora

authorized share capital for which the shares were issued to the shareholder.
Search for questions, people, and topics Ask New Question Sign In
Also, the paid up capital is always less than the authorized capital. In addition to
this, the authorized capital can be increased anytime with the prior permission
of the shareholders. Related Questions

5.7k Views · View 2 Upvoters

What is paid up capital?

What is the difference between paid up share

capital and issued share capital?

What is difference between authorised capital and

paid up capital?
Related Questions
What is authorized, issued, subscribed and paid
Indian Businesses: Which is better to own: authorized share capital or paid up capital? up capital?

What is the meaning of minimum paid up capital? What is paid up share capital?

How much is the paid-up capital? Indian Businesses: Which is better to own:
authorized share capital or paid up capital?
What is authorized capital and why it is necessary?

What is the difference between market capital and paid up capital? What is the meaning of minimum paid up capital?

What is “paid-up capital”? How much is the paid-up capital?

What is paid up capital in a company? What is authorized capital and why it is

necessary?
What is mean by paid up capital of a bank?

What is the difference between paid-up capital and subscribed capital? What is the difference between market capital and
paid up capital?
What is the authorized capital and paid up capital of banks?

What is the difference between authorized share capital and paid-up share capital?  Ask New Question
What is the difference between called up capital and paid up capital?

What is the difference between authorized capital and authorized share capital?

What is the difference between paid in capital and earned capital? How are they similar?

In private equity and venture capital, is dry powder the difference between committed
capital and paid in capital?

 Ask New Question

About · Careers · Privacy · Terms · Contact

 Still have a question? Ask your own!

What is your question? Ask

https://www.quora.com/What-is-the-difference-between-paid-up-capital-and-authorized-capital 6/6