Wednesday, July 27, 2011

Finance and Management - 18

In the last blog, we learnt the meaning of authorized capital. In today's blog we will understand the terms
  • Issued Capital
  • Subscribed Capital
  • Paid up Capital
Issued Capital indicates the number of shares that have been issued by a company.

Subscribed Capital indicates the total number of shares taken up by the public

Paid-up Capital indicates the amount of share capital that has been received by the company.

An Example would get the distinction clear

Let’s assume a company has an authorized share capital of 1,00,000 equity shares of Rs 10 each. Of these around 40,000 could have been issued capital. Let’s assume the public has taken 25,000 shares, which will be in circulation. If the company has called up and received Rs 7 on each share, the company's paid up capital will be Rs 1, 75,000 (25,000 x Rs 7 per share)

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