What is capital paid-up?

What Is Paid-Up Capital? Paid-up capital is the amount of money a company has received from shareholders in exchange for shares of stock. Paid-up capital is created when a company sells its shares on the primary market directly to investors, usually through an initial public offering (IPO).

What is Authorised capital?

Meaning of Authorised Capital Known as the registered capital or nominal capital of the company, Authorised Capital is the maximum amount of share capital that a company is allowed to issue to its shareholders as per its constitutional documents.

What is Authorised capital with example?

Example. If XYZ Pvt Ltd has an authorised capital Rs. 20 lakhs and shares issued to shareholders up to an amount of Rs. 15 lakhs, it means that XYZ Pvt Ltd has issued shares that are not above the maximum limit of the company’s authorised capital.

Why is paid up capital important?

Besides an initial source of funds, paid-up capital also reflects the financial strength and liquidity of a company. In the unfortunate event that a company fails, creditors may lay claim to any unused paid-up capital. As such, paid-up capital is important as it represents money that is not borrowed.

How do you calculate a company’s paid up capital?

Paid-in capital formula It’s pretty easy to calculate the paid-in capital from a company’s balance sheet. The formula is: Stockholders’ equity-retained earnings + treasury stock = Paid-in capital.

Is paid-up capital same as share capital?

Paid-Up Share Capital: An Overview. The difference between called-up share capital and paid-up share capital is that investors have already paid in full for paid-up capital. Share capital consists of all funds raised by a company in exchange for shares of either common or preferred stock.

What is paid-up capital of a company in India?

It is the amount of money for which shares of the Company were issued to the shareholders and payment was made by the shareholders. 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.

What is the difference between subscribed and paid-up capital?

Hence, the capital allotted and paid by shareholders is called paid-up capital. This shows the amount received either in cash or in kind by the company from the allottees of shares subscribed by them. That part of the subscribed capital that remains to be paid is called “Calls in Arrears” or “unpaid share capital”.

Is paid up capital taxable?

Higher corporate tax rate – companies with paid up share capital of RM2. 5 million or more cannot enjoy the lower rate of 20\% for the first RM500,000 taxable profit. Instead, they will be subject to the flat 25\% tax rate on all profits.

When should paid up capital be paid?

In Singapore, the minimum paid-up capital is $1 per shareholder. Upon incorporation, this paid-up capital must be paid up immediately and this money has to be deposited into the company’s bank account once the account is opened.

What are examples of paid in capital?

For example, if 1,000 shares of $10 par value common stock are issued by a corporation at a price of $12 per share, the additional paid-in capital is $2,000 (1,000 shares × $2). Additional paid-in capital is shown in the Shareholders’ Equity section of the balance sheet.

What is the difference between authorized and paid-up capital?

Difference Between Authorized and Paid-up Capital. Authorized capital is the maximum value of the shares that a company is legally authorized to issue to the shareholders. Whereas, paid-up capital is the amount that is actually paid by the shareholders to the company. At any point, the paid-up capital of a company can never be more

What is authorized capital of a company?

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.

What is meant by paid up capital of a company?

Paid-up Share Capital. It is the maximum amount of the capital for which shares can be issued by the Company to shareholders. The Authorised capital is mentioned in the Memorandum of Association of the Company under the heading of “Capital Clause”. It is even decided prior to incorporation of the Company.

What is difference between authorisedauthorise share capital and paid-up share capital?

Authorise Share Capital is the amount for which a Company can issue shares to the shareholders whereas; a Paid-up Share Capital is the amount of money received from the shareholders for the shares allotted to them.