Share Capital

The capital of a joint stock company is divided into shares and called ‘Share Capital’. The share capital may be classified as below:
(1) Nominal: This is the amount of the capital which is stated in Memorandum of Association and with which the company is registered. Nominal capital is the maximum amount which the company is authorized to raise from the public.
(2) Issued Capital: This is the nominal amount of shares actually issued to the public. In other words, issued capital is that part of the nominal capital, which is offered to the public for subscription. The balance of the nominal capital, which is not offered to the public for subscription, is called un-issued capital.
(3) Subscribed Capital: This is the nominal amount of the shares taken up by the public. In other words, subscribed capital is that part of the issued capital, which is applied for by the public. The balance of the issued capital, which is not subscribed for by the public is called, unsubscribe capital.
(4) Called up Capital: This is the amount of the capital that the shareholders have been called to pay on the shares subscribed for by them. The nominal amount of the shares is usually collected from the shareholders in installments and it is possible that the entire amount of the subscribed capital may not have been called. The amount of the subscribed capital, which is not called, is known as uncalled capital.
(5) Paid up Capital: This represents that part of the called up capital, which is actually received by the company. The amount of the called-up capital, which not paid by the shareho0lders, is called as unpaid capital or calls in arrears.
(6) Reserve Capital: A company may by special resolution determine that any portion of its share capital which has not been already called up, shall not be capable of being called-up, except in the event of winding up of the company. Such type of share capital is known as reserve-capital