What are the various kinds of capital?

Answer 1

1- Authorized Capital ( legally permitted number of shares) i,e 20 million dollars

2- Subscribed Capital/issued capital (sold or issued but not paid yet by the holders)i,e 17 million dollars

3- Called up Capital ( company asks or calls to pay certain number of shares)

i,e 17 million dollars

4- Paid up Capital (this is actually paid by holders, amount reflects in Balance sheet)

i,e 16 million dollars

Capital:

The term capital means the amount of money invested by the owner in the business to start a business. In case of Joint Stock Company the term share capital refers to the amount of money raised by the issue of shares.

Kind of Capital:

Authorized Capital:

The authorized capital is also called nominal or registered. This is the maximum amount of capital which a company is authorized to issue. The amount of authorized capital is mentioned in the capital clause of memorandum of association along with its division into shares of fixed amount, for example 20 million dollars of 20 dollars each

Issued Capital:

Issued capital is that part of authorized capital which is offered to the public for subscription or for the sale of shares. For example, if the authorized capital of a company is 20 Million and the company issues shares valuing 17 million $ then the issued capital of the company is 17 million $.

Un-issued Capital:

The Portion of the authorized capital, which is not offered to the public for the sale of shares are known as un-issued capital. In the above example the un-issued capital of the company is 3 million $.


Called-up Capital:

The part of the subscribed capital, which in fact the company asks the shareholders to pay, is called the called up capital. for example company asks to pay 17 million so this is called up captial

Paid up capital:

this is the portion of that share which are acutally paid and it is shwon in the balance sheet, for example out of 17 milllion 16 million is paid by the holders so 16 million is paid up capital and it is shown in the balance sheet

Capital:

In simple words the term capital means the amount of money invested by the owner in the business to start a business. In case of Joint Stock Company the term share capital refers to the amount of money raised by the issue of shares.

Kind of Capital:

Authorized Capital:

The authorized capital is also called nominal or registered. This is the maximum amount of capital which a company is authorized to issue. The amount of authorized capital is mentioned in the capital clause of memorandum of association along with its division into shares of fixed amount.

Issued Capital:

Issued capital is that part of authorized capital which is offered to the public for subscription or for the sale of shares. For example, if the authorized capital of a company is 10 Million and the company issues shares valuing 7 million $ then the issued capital of the company is 7 million $.

Un-issued Capital:

The Portion of the authorized capital, which is not offered to the public for the sale of shares are known as un-issued capital. In the above example the un-issued capital of the company is 3 million $.

Called-up Capital:

The part of the subscribed capital, which in fact the company asks the shareholders to pay, is called the called up capital.