Classification of Share Capital

Share capital of a company can be classified into 5 ways which are as follows –

1. Authorized or nominal share capital – It is the share capital which the company is authorized to issue by its memorandum of association. It is the maximum amount up to which a company is authorized to issue shares to the public without altering the memorandum of association.

2. Issued capital – It is the nominal value of shares which are offered to the public for subscription through initial public offering.
3. Subscribed Capital – It is the value of the shares taken up by the public through initial public offering, it will be equal to issued capital when all the shares offered to the public are taken by the public.

4. Called up capital – It is that part of the capital which has been called up. Sometimes company takes the money in installments like 20 percent on application remaining after some time. It will be equal to subscribed capital if company takes all money at one go.
5. Paid up capital – It is that part of the called up capital which has been paid by the shareholders of the company.

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