# Authorised Capital and Called-Up Capital

## Core Idea

Share capital is described in several layers — each layer answers a different question: 'how much CAN we issue?', 'how much HAVE we issued?', 'how much have we ASKED for?'. Two key layers are Authorised Capital and Called-Up Capital.

## 1. Authorised Capital

The maximum amount of share capital that a company is authorised to issue.
Specified in the Memorandum of Association (MOA).
Also called Nominal Capital or Registered Capital.
Can be increased only by following the procedure for alteration of capital clause of MOA.

## 2. Called-Up Capital

The part of the subscribed capital that the company has called for payment from shareholders.
Represents the actual demand made by the company.

## 3. Where They Fit in the Capital Hierarchy

```

Authorised Capital

↓ (issued from)

Issued Capital

↓ (subscribed by investors)

Subscribed Capital

↓ (called for payment)

Called-Up Capital

↓ (actually received)

Paid-Up Capital

```

## Memory Hook

Authorised = ceiling (set by MOA)
Called-Up = part of subscribed capital that the company has formally demanded payment for

⚠️ Common exam mistakes

Treating authorised capital as equal to issued or called-up capital — these are distinct layers.
Confusing called-up capital with paid-up capital — called-up is the demand; paid-up is what was actually received.

Bare-Act text Section 2(8), 2(15) · Companies Act, 2013 · click to expand

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(15) — 'called-up capital' means such part of the capital, which has been called for payment.

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Authorised Capital and Called-Up Capital

Worked example

⚠️ Common exam mistakes