What counts as the share capital of a company?
Share capital is the capital of a company that is divided into shares. Authorised capital is the maximum the memorandum allows. Paid-up capital is the amount actually paid on the shares that have been issued. The Act sets no minimum paid-up capital.
Which figures are capital?
| Figure | What it is |
|---|---|
| Authorised | The ceiling written in the memorandum. Issuing beyond it needs an alteration of the memorandum |
| Issued and subscribed | The part offered, and the part taken up by shareholders |
| Paid-up | The amount paid up on those shares. Calls still unpaid are not paid-up |
Who holds the shares is on the shareholder page.
Which shares make it up?
Equity shares and preference shares. Preference shares carry a preferential dividend. Equity does not guarantee one. A private company is still a company limited by shares when it has this capital. How it is formed is on the private-company page.
What is not share capital?
A loan is not share capital. That borrowing is on the debt page. An LLP has partners’ contribution, not share capital. A reserve built from profit is not a fresh issue of shares.
Frequently asked questions
Four questions cover authorised capital, a minimum, a loan, and an LLP.
Is authorised capital the money received?
No. Authorised capital is the ceiling in the memorandum. Paid-up capital is what has been paid on the shares that were issued.
Is there a minimum paid-up capital?
No. The Companies Act does not set a minimum paid-up capital for a private company or a public company.
Is a loan share capital?
No. A loan is a debt. Share capital is what shareholders pay for shares. Debt financing is a different page.
Does an LLP have share capital?
No. Partners make a contribution. They do not hold shares. Share capital is a company concept.
Sources
Paid-up share capital is section 2(64) of the Companies Act, 2013. Authorised capital is stated in the memorandum. Equity and preference shares are section 43.