When establishing a company, comprehending the concepts of Authorized and Paid-Up Capital in Company Registration » is crucial for compliance and financial planning. These two components play a vital role in determining the scope of a company's funding and its ability to operate legally in India.

What is Authorized Capital?

Authorized capital refers to the maximum amount of capital a company is permitted to raise through the issuance of shares. This limit is defined in the company’s Memorandum of Association (MoA) and can be increased later with proper regulatory approval. It acts as a cap on the company's potential for fundraising from its shareholders.

What is Paid-Up Capital?

Paid-up capital represents the portion of the authorized capital that shareholders have paid to the company. This is the actual amount received by the company in exchange for shares issued. Unlike authorized capital, paid-up capital reflects the real-time investment and operational funds available.

Importance in Company Registration

During company registration, founders must declare the authorized and paid-up capital. These figures impact regulatory compliance, such as stamp duty and minimum capital requirements. Proper planning of authorized and paid-up capital ensures smooth business operations and scalability. For more information, visit us on: https://www.registerkaro.in/ »