authorised capital and Paid-up Capital

  authorised capital 

of a company is the maximum amount of share capital for which shares can be issued by a company. 

The initial authorised capital of the Company is mentioned in the Memorandum of Association of the Company and is usually Rs. 1 lakh.

 The company can increase the capital at any time with shareholders approval and by paying an additional fee to the Registrar of Companies


Paid-up 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. 

Paid-up capital will always be less than authorised capital as a company cannot issue shares above it authorised capital.

The Companies Act, 2013

earlier mandated that all Private Limited Companies have a minimum paid-up capital of Rs.1 lakh. 

This meant that Rs.1 lakh worth of money had to be invested in the company by purchase of the company shares by the shareholders to start the business.

 However, the Companies Amendment Act, 2015 relaxed the minimum requirement for paid-up capital. 

Therefore, there is now no requirement for any minimum capital to be invested to start a private limited company.


source 

www.indiafilings.com

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