The document discusses the different categories of share capital for a company: 1) Authorized capital is the maximum capital that a company is permitted to issue according to its memorandum of association. 2) Issued capital is the part of authorized capital that has been issued for public subscription. 3) Paid-up capital is the portion of the issued capital that has been received from shareholders based on their obligations to pay. It represents the capital currently held by the company.

1. Module II- Company Accounts- Issue of Shares
Financial Accounting
II Sem B Com Finance & B Com Taxation

2.  The capital of company is called Share Capital
 It is divided into small and equal units.
 Each unit is called a Share
 A share is the individual portion of the Company's capital owned by a share
holder in the company.
 Sec 2(84) of the Companies Act, 2013 defines a “share” means share in the
share capital of the company and it includes stock.
 Each share has its own distinctive number.
 Shares are classified as movable property, transferable in the manner
specified by the Articles.
 Equity Shares & Preference Shares
SHARES

3. PHASES OR CATEGORIES OF SHARE CAPITAL

4. PHASES OR CATEGORIES OF
SHARE CAPITAL

5. Authorized Capital:
 ABC Private Limited
Company has an
authorised capital of
Rs.10 lakh.
 It means that ABC
Private Limited Company
can issue shares worth
up to Rs.10 lakhs to its
investors
 ABC Private Limited
Company cannot issue
shares worth Rs.11 lakhs
to its investors
 as the company has not
issued shares in excess of
the authorised capital.
Authorized/ Registered Capital:
 Capital with which a company
is registered
 It is capital mentioned in MoA
 Maximum amount of capital
can issue
 Also called Nominal Capital /
Registered Capital

6. Issued Capital:
Issued Capital:
 It is part of Authorized Capital which is issued
to the public for subscription.
 The remaining part of the authorized capital is
known as the Unissued Capital.  From 10lakhs of
Authorized Capital,
ABC Pvt.Ltd Co.
issued 80000
shares of Rs. 10
each for Public
Subscription.
Un
Issued
Issued
Authorized Capital

7. Subscribed Capital:
Subscribed Capital:
 It is that part of the issued capital which has
been actually subscribed by the public.
 When the shares offered for public subscription
are subscribed fully by the public the issued
capital and subscribed capital would be the
same.
 From 8lakh of Issued
Capital of ABC Pvt.Ltd
Co. may be only 7Lakhs
or 8Lakhs should be
subscribed by Public

8. Issued Capital:
Called up Capital:
 It is the amount of the subscribed capital
which the directors have called from the
shareholders.
 It is amount which company has asked
its shareholders to pay.
 The company may decide to call the
entire amount or part of the face value of
the shares
 If the face value
(also called nominal
value) of a share
allotted is Rs. 10
and the company
has called up only
Rs. 7 per share, in
that scenario, the
called up capital is
Rs. 7 per share.
 The remaining Rs.
3 may be collected
from its
shareholders as and
when needed.
Note: Face Value/Nominal Value of share is
value of the company as listed in its books
and share certificate.

9. Paid-up Capital:
Paid-Up Capital:
 It is that portion of the called up capital
which has been actually received from
the shareholders.
 When the shareholders have paid all the
call amount,
 Called Up Capital = paid up capital.
 If any of the shareholders has not paid
amount on calls, such an amount may be
called as ‘Calls In Arrears’.
 Therefore,
ABC Pvt. LTD Co. Issued
80000 shares of Rs. 10
each payable as follows:
Application : 3 Rupees
Allotment : 2 Rupees
First Call : 3 Rupees
Final Call : 2 Rupees
One of the shareholder he
failed to Final call money.
Paid Up Capital = Called-up capital - Calls In Arrears

10. Reserve Capital:
 A limited company by passing a special resolution
may set apart a portion of the uncalled capital as
Reserve capital
 A company may reserve a portion of its uncalled
capital to be called only in the event of winding up
of the company.
 Such uncalled amount is called ‘Reserve Capital’
of the company.
 It is available only for the creditors on winding up
of the company.

11. AUTHORISED CAPITAL VS PAID UP CAPITAL

12. ASHIDA AP
Asst. Professor Dept. of Commerce,