Terms Used In Relation To Share Capital

June 6th, 2007 Comments off
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Terms used in Relation To Share Capital
Authorised Share Capital

  • Also call Nominal Capital
  • This is the total amount of share capital stated in the Memorandum of Association that can be offered for subscription

Issued Capital

  • This is the part of the authorized capital that has been offered to the public for subscription and has been ACTUALLY allotted to the subscribers
  • Usually includes shares issued other than for cash and those issued for cash
  • The issued capital CANNOT BE MORE than the authorized capital

Called-up Capital:

  • A company may not require the full amount of money to be paid immediately by the subscribers on the issues of its shares.
  • It “calls up” only when it needs the cash and hence that portion of the issued capital which has been called up is termed Called-up capital

Uncalled Capital:

  • This is the portion of the nominal value of the share actually issued which has not yet been called up.

Paid-up Capital:

  • This is the amount of called-up capital that has been paid up by the shareholders.
  • When the shareholder fails to pay the sum due from him when a call is made, the amount outstanding is term CALLS IN ARREAR.
 Refer to earlier articles on Different Classes of Share Capital

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