capital

AUTHORIZED CAPITAL:
It is the amount of capital with which the company is registered. This capital is mentioned in i memorandum of association. A mention is also made of the number of shares into which this total capia divided, and of the par value of shares. In later years, if the company wants to either increase or decra this capital, certain legal requirements must be met. This capital is also known as nominal capita registered capital.
ISSUED CAPITAL:
Shares offered to the general public for contribution are known as shares issued. The total par « of such shares is called issued capital. To begin with, a company seldom offers all of its sharal subscription. Therefore, the amount of issued capital is generally less than the authorized capital 1 company has an authorized capital of Rs. 10,00,000 divided into 10,000 shares of Rs. 100 each decide to offer 5,000 shares to the general public. In this case the issued capital is said to be Rs. 5.00m divided into 5,000 shares of Rs. 100 each.'The remainder, that is, the difference between the authorized issued capital is known as unissued capital.
SUBSCRIBED CAPITAL:
Out of the total number of shares offered (issued) by the company, that number of shares taken up by the public is known as shares subscribed. The total par value of such shares is called subs™ capital. For example, out of the 5,000 shares issued by the company, if the public takes up 4,500 sharsJ subscribed share capital is Rs. 4,50,000 (4,500 shares x Rs. 100 par value of each share).
CALLED-UP CAPITAL:
A company may require payment of the par value either in instalments or in one lump amount is known as the called-up capital. For example, for each of the 4,500 shares taken up by the a the company may require a payment of Rs. 70 per share (the remainder Rs. 30 per share to be asked for by the company. In this case the called-up capital of the company is Rs. 3,15,000 (4,500 > per share called-up). The difference between the subscribed capital and the called-up capital is txJ un-called capital. In this case the un-called capital is Rs. 1,35,000 (Rs. 4,50,000 subscribed capitals Rs, 3,15,000 called-up capital or 4,500 shares subscribed x Rs. 30 per share uncalled. AcccrrJ Companies Ordinance, 1984, shares are always issued at full price (full amount is called up on appfi^l Therefore, there is no difference between subscribed and called capital.
PAID-UP CAPITAL:
The total amount received by the company out of the total called-up amount is known as oeJ up capital. Assuming that of Rs. 3,15,000 called-up capital the company received Rs. 3,00,00t up capital is in the amount of Rs. 3,00,000. The remainder of Rs. 15,000 is known as calls unpaid o^H arears. Now-a-days the total par value is collected at the time of application and as such practical are no calls in arrears. Presently, therefore, the subscribed, called-up and paid-up capitals are ; i amount.
RESERVE CAPITAL:
It is the portion of the subscribed capital which the company, through a special resolutioa ^1 to call in the event of winding up. Assume that 4,500 shares Rs. 100 are subscribed, the compa^^H to a 11 Rs. 70 per share and passed a special resolution to the effect that Rs. 30 per share will be calfl the event of winding up. The company is said to have reserve capital of Rs. 1,35,000 (4,500 x Rj share). Reserve capital cannot be turned into ordinary capital without leave of the court, and it ~aM dealt with or charged by creditors.