{“@context”:”https://schema.org”,”@type”:”BlogPosting”,”headline”:”Authorised Capital vs Paid-Up Capital: Differences, Limits and How to Increase”,”description”:”Clear explanation of the difference between authorised capital and paid-up capital in an Indian company — definitions, limits, MOA implications, how to increase authorised capital via Form SH-7, and the share premium concept.”,”author”:{“@type”:”Person”,”name”:”CA Madhusmita Padal”},”publisher”:{“@type”:”Organization”,”name”:”Tradeviser”},”datePublished”:”2026-09-27″,”inLanguage”:”en-IN”,”mainEntityOfPage”:{“@type”:”WebPage”,”@id”:”https://tradeviser.com/authorised-capital-vs-paid-up-capital/”}}

{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”What is the difference between authorised capital and paid-up capital?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Authorised capital (also called nominal capital) is the maximum amount of share capital that a company is legally allowed to issue, as stated in its Memorandum of Association. Paid-up capital is the actual amount received by the company from shareholders who have paid for their shares. Paid-up capital can never exceed authorised capital, but it is typically much lower.”}},{“@type”:”Question”,”name”:”What is the minimum authorised capital for a Private Limited Company?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”There is no statutory minimum authorised capital for a Private Limited Company under the Companies Act 2013. Companies can incorporate with authorised capital as low as ₹1 lakh (the common base for calculating ROC fees). The common practice is to keep authorised capital at ₹1 lakh to minimise ROC stamp duty and fees.”}},{“@type”:”Question”,”name”:”How do you increase authorised capital?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”To increase authorised capital, the company must: (1) Pass an Ordinary Resolution at a General Meeting (if the Articles permit, which most do); (2) File Form SH-7 with MCA within 30 days of the resolution; and (3) Pay the additional stamp duty on the increased capital amount. The MOA’s Capital Clause is automatically updated upon MCA approval.”}},{“@type”:”Question”,”name”:”What is subscribed capital and issued capital?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Issued capital is the portion of authorised capital that has been formally offered to the public or to specific investors. Subscribed capital is the portion of issued capital for which applications have been received from investors. Paid-up capital is the portion of subscribed capital that has actually been paid by subscribers. The hierarchy is: Authorised ≥ Issued ≥ Subscribed ≥ Paid-up.”}},{“@type”:”Question”,”name”:”What is share premium?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Share premium is the amount received by a company over and above the face value of a share. For example, if shares with a face value of ₹10 are issued at ₹100 (common in funded startups), the ₹90 difference is share premium. Share premium is credited to the Securities Premium Reserve account and can be used for specific purposes (bonus shares, writing off IPO expenses, buyback premium).”}}]}

{“@context”:”https://schema.org”,”@type”:”HowTo”,”name”:”How to Increase a Company’s Authorised Capital”,”step”:[{“@type”:”HowToStep”,”position”:1,”name”:”Check the Articles of Association”,”text”:”Most AOAs allow increase of authorised capital by Ordinary Resolution. Verify this clause before calling the meeting.”},{“@type”:”HowToStep”,”position”:2,”name”:”Pass an Ordinary Resolution”,”text”:”Hold a Board Meeting, then a General Meeting (EGM or AGM). Pass an Ordinary Resolution to increase the authorised capital to the new amount.”},{“@type”:”HowToStep”,”position”:3,”name”:”File Form SH-7 with MCA”,”text”:”File Form SH-7 on the MCA21 portal within 30 days of the resolution, along with the certified true copy of the resolution.”},{“@type”:”HowToStep”,”position”:4,”name”:”Pay stamp duty on increased capital”,”text”:”Pay additional stamp duty on the incremental authorised capital amount as per the state’s stamp duty schedule.”},{“@type”:”HowToStep”,”position”:5,”name”:”Update MOA Capital Clause”,”text”:”The MOA Capital Clause is updated automatically in MCA’s records on SH-7 approval. No separate MOA amendment is needed.”}]}

CA Madhusmita Padal

CA Madhusmita Padal is a Practicing Chartered Accountant with firms based in Odisha and Chennai. She specializes in taxation, company law, and auditing. She is passionate about simplifying complex concepts and making knowledge accessible to all.