Authorized capital, issued capital and paid up capital

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Authorized capital

Authorized capital means the maximum limit that a company can increase its issued capital. There is a legal provision that such maximum limit can be increased by amending the management letter of the company.

Issued capital

Issued capital refers to the capital that a company aims to raise from shareholders. The shareholders have expressed their commitment to raise capital accordingly.

Paid up capital

Paid up capital refers to the total capital paid up by the shareholders out of the capital pledged by the shareholders issued by the company. For example, if the shareholders pay only Rs 50 per share for the shares issued at the rate of Rs 100 per share, then the paid up price is Rs 50 per share.

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