## Share and Types of Share Capital

### Share [Section 2(84)]

'Share' means a share in the share capital of a company, and includes stock.

### Hierarchy of Share Capital

Share capital is layered, with each layer being a subset of the one above:

```

Authorised / Nominal Capital [Sec 2(8)]

Issued Capital [Sec 2(50)]

Subscribed Capital [Sec 2(86)]

Called-up Capital [Sec 2(15)]

Paid-up Capital [Sec 2(64)]

```

### 1. Authorised Capital / Nominal Capital [Section 2(8)]

Means such capital as is authorised by the Memorandum of Association of the company to be the maximum amount of share capital of the company.

### 2. Issued Capital [Section 2(50)]

Means such capital as the company issues from time to time for subscription.

### 3. Subscribed Capital [Section 2(86)]

Means such part of the capital which is for the time being subscribed by the members of the company.

### 4. Called-up Capital [Section 2(15)]

Means such part of the capital which has been called for payment.

### 5. Paid-up Share Capital [Section 2(64)]

Means the aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued. Also includes any amount credited as paid-up in respect of shares of the company, but does NOT include any other amount received in respect of such shares, by whatever name called.

### Worked Numerical Illustration

Item	Amount (₹)
Authorised Capital (10,00,000 shares × ₹10)	1,00,00,000
Issued (8,00,000 shares × ₹10)	80,00,000
Subscribed (7,00,000 shares × ₹10)	70,00,000
Called-up (₹8 per share called on 7,00,000)	56,00,000
Paid-up (received on 6,80,000 shares)	54,40,000
Calls in arrears (20,000 × ₹8)	1,60,000

Paid-up capital = Called-up capital − Calls in arrears.

Worked example

### Example 1

Q. A company has authorised capital of ₹50 lakh, issued capital of ₹30 lakh, subscribed capital of ₹25 lakh, called-up capital of ₹20 lakh (i.e., ₹8 per share on 2.5 lakh shares). Calls in arrears amount to ₹50,000. Calculate the paid-up capital.

A. Paid-up Capital = Called-up Capital − Calls in Arrears = ₹20,00,000 − ₹50,000 = ₹19,50,000.

### Example 2

Q. Is share premium a part of paid-up capital?

A. No. Section 2(64) specifically excludes 'any other amount received in respect of such shares, by whatever name called'. Hence the amount received as share premium is not included in paid-up share capital.

⚠️ Common exam mistakes

Treating authorised, issued, subscribed, called-up and paid-up capital as the same.
Including share premium in paid-up share capital.
Ignoring calls in arrears while computing paid-up capital.
Forgetting that 'share' includes 'stock' as per Section 2(84).

Bare-Act text Sections 2(84), 2(8), 2(50), 2(86), 2(15) and 2(64) · Companies Act, 2013 · click to expand

Section 2(84) 'Share' means a share in the share capital of a company and includes stock. Section 2(8) 'Authorised capital' or 'Nominal capital' means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company. Section 2(50) 'Issued capital' means such capital as the company issues from time to time for subscription. Section 2(86) 'Subscribed capital' means such part of the capital which is for the time being subscribed by the members of a company. Section 2(15) 'Called-up capital' means such part of the capital, which has been called for payment. Section 2(64) 'Paid-up share capital' or 'share capital paid-up' means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called.

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Share and Types of Share Capital [Sections 2(84), 2(8), 2(50), 2(86), 2(15), 2(64)]

Worked example

⚠️ Common exam mistakes