Types of Share Capital

Types of Share Capital

Share capital may be categorized into authorized capital, issued capital, subscribed capital, called up capital, and issued capital. Difference types of capital have been explained in logical sequence below;

1.    Authorized Capital

Authorized capital is the amount of capital, which a company can raise during its life. Authorized capital is normally mentioned in creation document of company. Authorized capital is used to calculate the license fee for company registration.

2.    Issued Capital

Company may not necessarily interest to raise all of its authorized capital at once. Therefore management may decide to issue some of its authorized capital for subscription.

3.    Subscribed Capital

Public may not be interested to take all the issued capital and may subscribed to a certain amount of shares. This amount shall not exceed the issued capital.

4.    Call up Capital

Companies may not be interested to take all the subscribed capital at once and may take the subscribed capital in installment. The amount which called from the shareholder is known called up capital. This capital does not exceed the subscribed Capital.

5.    Paid up Capital

The amount of called up capital, which is actually paid by the shareholder are known as paid up capital. This capital is paid in response of company called up capital; most of the time called up & paid up capital coincides.