answersLogoWhite

0

The amount of authorized share capital refers to the number of stock units that a publicly traded company can issue as stated in its articles of incorporation. It can also be as agreed upon by a shareholder vote.

User Avatar

Wiki User

10y ago

What else can I help you with?

Continue Learning about Finance

Authorized and issued share capital?

Authorized share capital is that maximum amount of share capital a company can do it’s business and return in article of association of company and company cannot raise more capital then this limit unless changes the limit of authorized capital.Issued share capital is that amount of capital which is issued to public for purchase or invest in company.


What is nominal share capital?

Nominal share capital is like an authorized share capital. The share capital that the company allowed (the maximum amount) to issue as registered capital when the company is incorporated. It can be changed later by the approval of the shareholders.


What are authorised shares capital?

Authorized share capital, also known as nominal or registered capital, refers to the maximum amount of share capital that a company is legally allowed to issue to shareholders as specified in its corporate charter. This limit can include different classes of shares, such as common and preferred stock. While a company may not issue all of its authorized shares, it cannot exceed this limit without amending its charter. The authorized share capital provides flexibility for future fundraising but does not reflect the actual amount of shares issued or outstanding.


What are the various kinds of capital?

1- Authorized Capital ( legally permitted number of shares) i,e 20 million dollars2- Subscribed Capital/issued capital (sold or issued but not paid yet by the holders)i,e 17 million dollars3- Called up Capital ( company asks or calls to pay certain number of shares)i,e 17 million dollars4- Paid up Capital (this is actually paid by holders, amount reflects in Balance sheet)i,e 16 million dollarsCapital: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 eachIssued 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 captialPaid 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 sheetCapital: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.


What is share capital clause?

The share capital clause is a provision in a company's constitutional documents, such as its articles of association, that outlines the total amount of share capital the company is authorized to issue, along with the types and classes of shares available. It specifies the rights attached to different classes of shares, including voting rights and dividend entitlements. This clause is essential for investors and regulatory bodies as it provides clarity on the company's capital structure and potential for future fundraising.

Related Questions

Authorized and issued share capital?

Authorized share capital is that maximum amount of share capital a company can do it’s business and return in article of association of company and company cannot raise more capital then this limit unless changes the limit of authorized capital.Issued share capital is that amount of capital which is issued to public for purchase or invest in company.


is the total amount of issued share capital for which the shareholders are required to pay is the authorized share capital or issued share capital or call up share capital or paid up share?

The total amount of issued share capital for which shareholders are required to pay is referred to as "issued share capital." This represents the portion of the authorized share capital that has been allocated to shareholders and is under their obligation to pay. In contrast, "paid-up share capital" refers to the amount that shareholders have actually paid, while "call-up share capital" pertains to amounts that may be called for payment in the future.


What is nominal share capital?

Nominal share capital is like an authorized share capital. The share capital that the company allowed (the maximum amount) to issue as registered capital when the company is incorporated. It can be changed later by the approval of the shareholders.


What is nominal share?

Nominal share capital is like an authorized share capital. The share capital that the company allowed (the maximum amount) to issue as registered capital when the company is incorporated. It can be changed later by the approval of the shareholders.


What is subscribed capital?

The individual subscribed share value and liability of the total share capital of a company. In detail: Par value of that part of the authorized share capital which has been issued (sold) as shares-whether their purchasers (shareholders) have paid for them or not. A firm can, at any time, issue new shares up to the full amount of authorized share capital. Also called subscribed capital, issued share capital or subscribed share capital.


Is authorized stock a liability on a balance sheet or only once it's issued?

Authorized stock becomes liability only once it is issued which is called issued capital and authorized capital is just there as an statement to inform the maximum amount of issued share capital.


What are authorised shares capital?

Authorized share capital, also known as nominal or registered capital, refers to the maximum amount of share capital that a company is legally allowed to issue to shareholders as specified in its corporate charter. This limit can include different classes of shares, such as common and preferred stock. While a company may not issue all of its authorized shares, it cannot exceed this limit without amending its charter. The authorized share capital provides flexibility for future fundraising but does not reflect the actual amount of shares issued or outstanding.


What is authorized capital and how different is that from paid up capital?

Authorized capital is the maximum amount from which company registered to be work with and written in its memorandum and articles unless it changes it and again register it with authorities the maximum capital cannot exceed with this amount. Paid up capital is the subscribed capital for which share holders have purchased shares of company for any specific period of time.


What is authorized capital?

Authorized capital is the capital to which an organization is authorised to use in the business and maximum amount that can be used for the working of organization.


What are the primary components of Authorized Capital?

The following are the main components of Authorized Capital: Authorized Shares: This means the maximum number of shares a Company can legally issue and it is specified in the MoA (Memorandum of Association) or AoA (Articles of Association) of a Company. Total Value: Nominal Capital signifies the maximum amount of capital a Company can raise via share issuance. You can calculate it by simply multiplying the number of Authorized Shares by the par value per share. Par Value per Share: This denotes the nominal value assigned to each share & sets a minimum issuance price. Remember that Par Value may not necessarily show the market value of the shares.


Can paid up capital greater than a companies authorised capital?

Authorized capital is the maximum amount company can raise so paid up capital cannot be more than authorized capital


What are different types of share capital?

1 – preference share capital2 – owners capital3 – Authorized share capital4 – Subscribed and paid up capital etc.