Difference between authorised share capital and paid up share capital?


What is difference between authorised share capital and paid up share capital of the company?

The authorised share capital of the company is minimum Rs 1 lakh. This means this is the maximum amount of shares a company can issue unless it increases its share capital.

The paid up capital of the company means the minimum amount the promoters want to invest in company. There is no requirement of minimum paid up capital. It can be as low as Rs 10. This is the amount the promoters have to deposit in company bank account once the company is incorporated.

Thus the company can be started with the capital of as low as Rs 10. Earlier the company could only be incorporated with the minimum paid up capital of Rs 100,000. But now this requirement has been done away with and company can be incorporated with as low as Rs 10.