Difference between Authorised and Paid Up Capital

Authorised Share Capital

Authorised Share Capital is also called nominal share capital, authorised capital of company. Authorised share capital is nothing but the maximum amount of share that the company is authorised by memorandum of article.

• Maximum amount of share that can be issued by the company.
• Authorised share capital amount is mentioned in the memorandum of association under capital clause.
• A Company can increase or decrease authorised share capital by giving notice to directors, members and auditor of the company by calling a board meeting and general meeting of members of the company to amend Memorandum.

Paid 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.
• Companies Amendment Act 2015, there is no requirement to have minimum paid up capital. After this amendment the company can have paid up capital of Rs. 100. Before this amendment every company shall have minimum paid up capital of Rs. 100000/-.
• To increase paid up capital private capital and share issued by the company.
• Companies can decrease paid up share capital by following buy back options and the procedure laid down by the companies act.