Share Capital

No trading concern can run without capital. The divisions of share capital are:

(i) Nominal or Authorized Capital. The amount of capital with which the company intends to be registered is called registered capital. It is the maximum amount which the company is authorized to raise by way of public subscription. There is no legal limit on the extent of the amount of authorized capital.

(ii) Issued Capital. That part of the authorized capital which is offered to the public for subscription is called issued capital.

(iii) Subscribed Capital. That part of the issued capital for which applications are received from the public is called the subscribed capital.

(iv) Called up Capital. The amount on the shares which is actually demanded by the company to be paid is known as called up capital.

(v) Paid up Capital. The part of the called up capital which is offered and is actually paid by the members is known as paid up capital. The sum which is still to be paid is known as calls in arrears.