Share Capital: The capital of a joint stock company is
divided into shares which are collectively called ‘Share Capital’. Share
capital refers to the amount that a company can raise or has raised by the
issue of shares. The share capital may be classified as below:
1.
Nominal/Authorized/Registered Capital: This
is the amount of the capital which is stated in Memorandum of Association and
with which the company is registered. Nominal capital is the maximum amount
which the company is authorised to raise from the public.
2.
Issued Capital:
Issued capital is that part of the nominal capital, which is offered to the
public for subscription. The balance of the nominal capital, which is not
offered to the public for subscription, is called unissued capital.
3.
Subscribed Capital: Subscribed
capital is that part of the issued capital, which is applied for by the public.
The balance of the issued capital, which is not subscribed for by the public is
called, unsubscribe capital.
4.
Called up Capital: This
is the amount of the capital that the shareholders have been called to pay on
the shares subscribed for by them. The amount of the subscribed capital, which
is not called, is known as uncalled capital.
5.
Paid up Capital: This
represents that part of the called up capital, which is actually received by the
company. The amount of the called-up capital, which not paid by the
shareholders, is called as unpaid capital or calls in arrears.
6.
Reserve Capital: A
company may by special resolution determine that any portion of its share
capital which has not been already called up shall not be capable of being
called-up, except in the event of winding up of the company. Such type
of share capital is known as reserve-capital.
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