Types of Share Capital
Share Capital simply refers to the money invested in a business in the form of shares. It includes all the funds that are collected in exchange of the issue of ownership interest in the form of shares of the company.
Following are the types of share capital:
The authorised share capital is the maximum amount of capital that a company is allowed to issue to the shareholders.
Issued share capital refers to the share capital that the company issues to its shareholders. The value of this share capital cannot be more than the authorised share capital.
This is that part of the issued share capital that is subscribed the public. It does not necessarily signify that the same value of capital will be taken over by the public.
The shareholders are required to pay the value of shares in different instalments and the amount that has been demanded or called upon to pay by the company is called the called-up capital.
The uncalled capital is the part of subscribed capital that has not been called upon by the company or the remainder capital.
The value of the shares that has been paid by the shareholders constitutes the paid-up capital.
The reserve capital is a part of the uncalled capital that can only be called upon at the time of winding up of the company.
