Difference Between Authorised and Issued Share Capital

Authorized share capital is the maximum extent of funding that can be raised through issue of shares. It is laid out in the company's charter documents. Issued and paid up share capital is the part of authorized share capital against which shares have been issued to share holders of a company against full payment.

1. What is an Authorised share capital?
2. What is issue share capital?
3. What is the difference between authorized capital and subscribed capital?
4. What is Authorised capital with example?
5. What is the minimum Authorised share capital?
6. Do companies still have Authorised share capital?

What is an Authorised share capital?

Authorized share capital is the number of stock units (shares) that a company can issue as stated in its memorandum of association or its articles of incorporation. ... Another reason to keep shares in the company treasury is to retain a controlling interest in the business.

What is issue share capital?

Issued share capital is simply the monetary value of the shares of stock a company actually offers for sale to investors. The number of issued shares generally corresponds to the amount of subscribed share capital, though neither amount can exceed the authorized amount.

What is the difference between authorized capital and subscribed capital?

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.

What is Authorised capital with example?

For Example: Suppose a firm has an authorized capital of Rs 50,00,000, then it can issue shares worth up to Rs 50,00,000 to its shareholders and cannot issue anything beyond it.

What is the minimum Authorised share capital?

1. It is the maximum value of the shares issued to the shareholders. The amount paid by the shareholders to the company for the company's financing. ... All new companies must authorize a minimum amount of capital, which is Rs 1 lakh for Pvt Ltd Companies and Rs 5 lakh for Public Limited Companies.

Do companies still have Authorised share capital?

The Companies Act 2006 abolishes the need for companies limited by shares to have an authorised share capital. This change takes effect on 1 October 2009 and is subject to transitional rules for existing companies.