Share Capital Formula
- Formula 1: Share capital equals the issue price per share times the number of outstanding shares.
- Formula 2: Share capital equals the number of shares times the par value of stock plus the paid in capital in excess of par value.
What is difference between paid up and authorized capital?
Authorized capital is the maximum value of the shares that a company is legally authorized to issue to the shareholders. Whereas, paid-up capital is the amount that is actually paid by the shareholders to the company. On the other hand, a company is not authorized to issue shares beyond the authorized share capital.
Can a company have no paid up capital?
You must also indicate the amount of issued capital i.e. the total amount that shareholders have paid for their shares. However, there is no minimum paid up capital required. A company may issue different types of shares with different conditions.
What is the definition of authorized share capital?
Authorized share capital is a broad term. It is used to describe every stock share a company could issue. Typically, this is divided into three categories. Paid-up Capital – these are shares issued in return for payment received from shareholders. Subscribed Capital – shares a company has a commitment from shareholders to purchase in the future.
What is the maximum amount of authorized capital?
Authorized Capital. Maximum value and amount of total shares that a company is authorized to issue legally is termed as authorized capital or authorized share capital.
What are the different types of authorized capital?
Authorized capital is divided into several categories: 1 Issued capital: The value of shares that have been issued 2 Paid-up capital: The money shareholders pay to the company to get shares 3 Uncalled capital: The amount of money shareholders still owe for shares they’ve purchased
Is there limit to number of authorized shares?
There is very little downside to not providing sufficient authorized shares; however, if you do have to increase the number of shares later, you will have to redraft and modify your articles of incorporation. Remember, there is no limit to the number of shares you may authorize at the time of incorporation. What is authorized share capital?
