|Authorized Capital||Paid-up Share Capital|
|The maximum value of the shares distributed to shareholders is termed Authorized Capital.||The sum paid to the company by its shareholders for its funding is termed as Paid-up Share Capital.|
|To raise it, MoA must alter it according to the manner outlined above.||It is done through a private placement or the issuance of shares.|
|This capital is not responsible for calculating the company’s or business’s net worth.||The quantity of paid-up capital is utilized to cover business expenses. Paid-up capital is utilized in the net worth calculation instead of permitted capital. Although the balance sheet mentions both authorized and paid-up capital, only Paid up Capital is used to calculate the firm’s net value.|
|A minimum amount of capital is required for all new firms, which is Rs 1 lakh for private limited companies and Rs 5 lakh for public limited companies.||Paid-up capital cannot be the same as authorized capital; it must be significantly lower or equal.|
|A Company cannot issue shares in excess of its authorized share capital.||A company’s paid-up capital can never exceed its authorized capital, although it can be equal to it at any time.|
A company’s capital structure is divided into two categories: Authorised share capital and paid-up share capital. The total amount of shares a business can issue to its shareholders is its authorized capital, whereas the total amount of shares it has actually issued to its shareholders is its paid-up capital.
The total amount of shares a business can issue to its shareholders is its authorized capital, whereas the total amount of shares it has actually issued to its shareholders is its paid-up capital.