Authorised Capital

The term authorised capital is also known as nominal capital or registered capital of the company. It is the maximum permissible capital that can be raised by the company through public issues.

Is authorised capital same as paid-up capital?

The authorised capital of a company is generally on a higher side as compared to the company’s current financial requirements. This leaves some buffer for subsequent and future issues if the company plans to raise additional capital.

Authorised capital is not the same as paid-up capital. While the former is the maximum capital of a company and is to be mandatorily mentioned in its memorandum and articles, the latter is the amount of share capital that has actually been subscribed to or paid by the shareholders