Authorized Capital
The capital which is maximum capital the
company can raise in its life
time. Hardly any company issues capital which is equal to authorised capital. Maximum value of securities that a firm can legally issue.
This number is specified in the memorandum of association (or articles of incorporation in the US) when a firm is incorporated, but can be changed later with shareholders' approval.
Authorized share capital may be divided into
(1) Issued capital: par value of the shares actually issued.
(2) Paid up capital: money received from the shareholders in exchange for shares.
(3) Uncalled capital: money remaining unpaid by the shareholders for the shares they have bought.
Also called authorized capital, authorized stock, nominal capital, nominal share capital, or registered capital.
Paid Up Capital
Paid-up capital is essentially the portion of authorized stock that the company has issued and received payment for.