What is the difference between paid up capital and equity?

What is the difference between paid up capital and equity?

Also called paid-in capital, equity capital, or contributed capital, paid-up capital is simply the total amount of money shareholders have paid for shares at the initial issuance. Paid-up capital is listed under the stockholder’s equity on the balance sheet.

What is paid up capital SSM?

What is paid-up capital? Paid-up capital is the amount of money that has been received from shareholders for the issue of shares.

What is paid up capital example?

Definition: The Paid-up Capital refers to the amount that has been received by the company through the issue of shares to the shareholders. For Example, A firm has an authorized capital of Rs 10,000,000, where the value of each share is Rs 10. …

What is Authorised capital?

Meaning of Authorised Capital Known as the registered capital or nominal capital of the company, Authorised Capital is the maximum amount of share capital that a company is allowed to issue to its shareholders as per its constitutional documents..

How do you determine authorized capital?

To increase the authorized capital, you will have to pay a fee to MCA: For Each Lakh of additional share Capital, INR 1 Lakh to INR 5 Lakhs; Charges per lakh of Authorized Capital is INR 4000/- For each lakh of additional share Capital, INR 5 Lakhs to INR 50 Lakhs; Charges per lakh of? authorized Capital is INR 3000/-.

How does paid-up capital work?

Paid-up capital is the amount of money a company has received from shareholders in exchange for shares of stock. When shares are bought and sold among investors on the secondary market, no additional paid-up capital is created as proceeds in those transactions go to the selling shareholders, not the issuing company.

Where can I find authorized capital?

Authorised Share Capital

• It is the maximum amount of the capital for which shares can be issued by the Company to shareholders.
• The Authorised capital is mentioned in the Memorandum of Association of the Company under the heading of “Capital Clause”.

What is Authorised capital with example?

Example. If XYZ Pvt Ltd has an authorised capital Rs. 20 lakhs and shares issued to shareholders up to an amount of Rs. 15 lakhs, it means that XYZ Pvt Ltd has issued shares that are not above the maximum limit of the company’s authorised capital..

How is Authorised capital calculated?

Share Capital Formula

1. Formula 1: Share capital equals the issue price per share times the number of outstanding shares.
2. Formula 2: Share capital equals the number of shares times the par value of stock plus the paid in capital in excess of par value.

How do you choose Authorised capital and paid up capital?

It is the amount of money for which shares of the Company were issued to the shareholders and payment was made by the shareholders. At any point of time, paid-up capital will be less than or equal to authorised share capital and the Company cannot issue shares beyond the authorised share capital of the Company.

Where does paid up capital go?

The primary market is the only place where paid-up capital is received, usually through an initial public offering.

How is Authorised capital decided?

Authorised Share Capital It is the maximum amount of the capital for which shares can be issued by the Company to shareholders. The Authorised capital is mentioned in the Memorandum of Association of the Company under the heading of “Capital Clause”. It is even decided prior to incorporation of the Company.

What is the difference between authorized capital and paid-up capital?

The Authorized capital needs to be specified in the Memorandum of Association (MOA) and can be divided into – Issued capital, which is the per value of the share that is actually issued. Paid up capital, which is the money received from the shareholders in exchange of the shares.

What is authorized capital and what is issued share capital?

Authorized Capital. It is the maximum amount of share that a company is authorized to issue to the shareholders. It is not necessary to issue the whole amount of the authorized capital, part of it can remain unissued. The amount of share that is issued to the shareholder is called the issued share capital of the company.

Can a company increase its paid up capital?

A company that is fully paid-up has sold all available shares and thus cannot increase its capital unless it borrows money by taking on debt. Paid-up capital can never exceed authorized share capital. In other words, the authorized share capital represents the upward bound on possible paid-up capital.

What does it mean to pay up share capital?

Paid up share capital means share capital called by the company and payment paid by the shareholders. This is the amount actually received by the company as a share capital. Companies cannot call and receive share capital more than authorised share capital. Paid up share capital can not be more than authorised share capital.