The term capital is used in the following senses:
1) Authorized or Nominal or Registered Capital [Section 2(8)]
- It means such capital as is authorized by the Memorandum of the company to be the maximum amount of share capital of the company.
- This is the maximum amount which a company is authorized to raise and beyond which it cannot raise unless the capital clause is altered.
- It is usually fixed at the amount which the company estimates it will require, and it includes working capital and reserve capital (if any).
(Stamp duty is payable on the basis of Authorized capital)
2) Issued Capital [Section 2(50)]
- It means such capital as the company issues from time to time.
- It is that part of authorized capital which is offered by the company for subscription and includes the shares allotted for consideration other than cash.
- It is obligatory for the company to disclose its issued capital in the balance sheet.
(Issue of shares for consideration other than in cash can be made for acquisition of assets of other company, acquisition of shares of other company, acquisition of technical know-how etc)
3) Unissued Capital
It refers to that portion of authorized capital which has not yet been issued.
4) Subscribed Capital
- As per Section 2(86), Subscribed capital means such part of capital which is for the time being subscribed (accepted) by the members of company.
- As per Section 60, where any notice, advertisement or other official communication or any business letter, bill head or letter paper of a company states the authorized capital, then the subscribed and paid up capital must also be stated in equally conspicuous characters. In case of default, the company is liable to pay a penalty of ₹10,000 and every officer in default ₹5,000 for each default.
5) Called-up Capital [Section 2(15)]
- It means such part of capital, which has been called up for payment Eg. For a share having FV ₹10 only ₹6 has been called-up.
6) Paid-up Capital [Section 2(64)]
- It is the total amount of money received and credited as paid-up in respect of shares issued, but does not include any other amount received in respect of such shares, by whatever name called.
Paid up capital = Called-up capital – calls in arrears
7) Uncalled Capital
- It refers to that portion of issued capital which has not yet been called up by the company.