Difference Between Paid Up Capital And Authorised Capital
This article explains the difference between authorized and paid up capital of a private limited company in india.
Difference between paid up capital and authorised capital. Authorise share capital is the amount for which a company can issue shares to the shareholders whereas. A paid up capital can never be in excess of a maximum approved capital i e authorized share capital and that is one of the major difference between authorized capital and paid up capital. At any point of time paid up capital will be less than or equal to authorised share capital and the company cannot issue shares beyond the authorised share capital of the company. A paid up share capital is the amount of money received from the shareholders for the shares allotted to them.
The companies act 2013 earlier mandated that all private limited companies have a minimum paid up capital of rs 1 lakh. Paid up capital will always be less than authorised capital as a company cannot issue shares above it authorised capital. Shared capital can be maximum up to the authorized capital and not beyond. Difference between authorized capital paid up capital.
Authorized capital has no limits in bangladesh. With the companies amendment act 2015 there is no minimum requirement of paid up capital of the company. Issued capital comprises of paid up share capital the amount of share capital already paid to the company by the company s shareholders and unpaid share capital. Paid up share capital of a company is the amount of money for which shares were issued to the shareholder for which payment was made by the shareholder.
In other words the authorized share capital represents the upward bound on possible paid up capital. Upon the company s incorporation paid up capital must be paid immediately and deposited into the company s bank account. In singapore the minimum paid up capital is 1. A paid up share capital should always be less than the authorized share capital.
M v can help with capitalization needs. It can be either an initial public offering ipo or an extra issue. An organization raises its financing with the assistance of the paid up capital.