Generally ‘Capital’ means a particular amount of money used
in business for the purpose of earning revenue. Share capital us that part of
the capital of a company which is represented by the total nominal value of the
shares which it has issued. In the context of the company law, this term is
used in the following senses:
Nominal or Authorized Capital: It means the face value (face
value is the amount stated on a share certificate) of the shares which a
company is authorized to issue by its memorandum. E.g. A. Ltd has been
incorporated with an authorised capital of USD 1000,000 divided into 100,000
shares of USD 10 each.
Issued Capital: It is that part of the Authorised capital
which is issued to public for subscription and allotment, say 65,000 shares of
USD 10 each.
Subscribed Capital: It is that part of the Issued capital
which has been subscribed by the public, say 60,000 shares of USD 10 each.
Called-up Capital: It is that part of the subscribed capital
which the directors have called up in order to carry on business of the
company, say, USD 5 per shares has been called up, i.e., 60000x$ 5=$300,000.
Paid-up Capital: It is that part of the called up capital
which is actually received in cash by the company, say $ 290000 (one
shareholder holding 5000 shares failed to pay the call @ $ 2 per share)
Uncalled Capital: It
is that part of the subscribed capital which has not yet been called up by the directors.
The difference between the subscribed capital and called up capital is
represented by the uncalled capital.
Reserve Capital: A limited company may, by 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 and for
the purposes of the company being wound up.
