Paid-up Capital (also called Paid-in Capital) is the portion of the authorized capital for which the company has actually received payment from shareholders. It represents the funds that shareholders have invested in the company.
Capital Hierarchy
- Authorized Capital: Maximum capital company can issue
- Issued Capital: Portion of authorized capital offered to subscribers
- Subscribed Capital: Portion of issued capital that investors agreed to take
- Called-up Capital: Portion of subscribed capital company has asked shareholders to pay
- Paid-up Capital: Portion of called-up capital actually paid
Key Points
- No Minimum: No minimum paid-up capital requirement for Pvt Ltd company
- Stamp Duty: Paid on authorized capital, not paid-up capital
- Increase: Can be increased through rights issue, bonus issue, or fresh allotment
- Reduction: Requires special resolution and tribunal approval
Example
| Capital Type | Amount |
|---|---|
| Authorized Capital | Rs. 10,00,000 |
| Issued Capital | Rs. 5,00,000 (50,000 shares of Rs. 10) |
| Subscribed Capital | Rs. 5,00,000 (all shares subscribed) |
| Called-up Capital | Rs. 5,00,000 (full amount called) |
| Paid-up Capital | Rs. 5,00,000 (all amount received) |
Impact on Company
- Higher paid-up capital indicates stronger financial base
- Required for certain contracts and tenders
- Affects borrowing capacity and creditworthiness
- Important for valuation and investor confidence
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