Paid Up Capital

One of the purposes of an IPO is to increase the company’s share capital through public participation. One of the categories of share capital of a company is called paid-up capital.

Paid-up capital is the amount that a company receives on its shares issued and subscribed by investors from the primary market. The paid-up capital can be less than or equal to the authorized capital it cannot be more than authorised capital.

What does paid-up capital include

The paid-up capital of a company is closely analysed by potential investors as it gives information of the existing capital employed in the company and how effectively it is utilized.

The paid-up capital can be made up of partly paid shares or fully paid shares. Party paid-up capital means that the company will receive an additional amount from the shareholders to the extent that its shares are unpaid.

Fully paid-up capital means that there is no amount due from the shareholder.