Share Capital and Types of Shares — SPCC STD 11 Commerce — Question

1. Authorized Share Capital: The amount of share capital is mentioned in the Capital clause of company’s Memorandum of Association is an authorized capital. This capital is also known as Registered Capital or Total Capital.
The company cannot issue shares more than the authorized capital. If in future it is required to collect more capital, there should be provision in Articles of Association. Moreover, consent is essential in the share holders’ meeting and resolution is to passed.
2. Issued Share Capital: The Company can issue share and collect share capital as and when it requires money. So the amount collected by issuing shares is termed as the Issued capital.
3. Subscribed Share Capital: The application received by a company for the issued share and the capital received for the same is termed as the Subscribed capital. If the amount is received more than the amount of issued share capital, still the applications accepted will be in accordance to the amount of issued share capital, rest of the amount is returned to applicants. So such accepted share capital can only be termed as the Subscribed share capital.
4.Called up Share Capital: In accordance with the face value as and when required, the company goes on calling for money in installments. So in this way the amount of money called is called up capital. Now a days usually company calls for a full amount of face value of share.
5. Paid up Share Capital: The amount received in ‘called up capital’ from shareholder is known as “paid up Share capital”
In the above sequence the capital mentioned in the lower order cannot exceed the capital in higher order.