Share Capital

It is a fund raised by the company by issuing shares to the general public in return of cash or other consideration. This is required for financing the overall business. This is a continuing process. Share capital also appears in the balance sheet of the company.

Authorized Capital:

This is the maximum amount of share capital that a company can raise for issuing it to the general public according to its Articles of Association. This limit cannot be raised or altered by the company unless amendments to the same are given in the Articles. By passing a special resolution and taking approval of the central Government and Registrar.

Issued Capital:

Out of the Authorized capital a required part which is issued to the public is called as issued capital. This is equal to or less than authorized capital. Capital is issued in its nominal value in the form of shares. This includes shares allotted to members in kind also.

Subscribed Capital:

A part of Issued Capital for which the subscription is received by the public is called as subscribed capital. It is the amount of capital which the general public is ready to pay to the company. Many a times it happens that a company with a good reputation in the financial market gets more subscription than required or issued by the company. This is called as oversubscription. The extra amount is refunded back to them.

Called-Up Capital:

The company might not require the whole amount of issue at a time. So it can ask the public to make the payment as and when required. Thus the value of issued share which is called by the company either fully paid or unpaid by the subscribers and is called for payment is called as called up capital. The called amount not paid by the subscribers is called as calls in arrears. Sometimes people pay the amount for all the calls in advance, which is credited to a separate account.

Paid-up Capital:

It is the amount of called-up capital paid by the subscribers to get the shares of the company and thereby convert themselves into the shareholders. The part which is not paid by the public is called as unpaid capital.