The authorised capital of a Company determines the value and number of shares a Company can issue to its shareholders.
Paid up share capital of a company is the amount of money for which shares were issued to the shareholder for which payment was made by the shareholder.
Increase of Authorised Capital
The authorised capital of a company can be easily changed by paying additional government fee, as prescribed by the Ministry of Corporate Affairs. Most promoters incorporate their company with an authorised capital of Rs.1 lakh or Rs.10 lakh and issue shares with a value of Rs.1 lakh or less to founding members.
The increase in authorised capital of a Company, must be approved by the Board of Directors of the Company.