Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Authorised = the ceiling
Authorised (or nominal) capital is the upper limit of share capital your company may issue, stated in the capital clause of its memorandum. It is a ceiling, not money in the bank — you can set it higher than you currently need, and stamp duty is charged on this figure.
Paid-up = actually issued
Paid-up capital is what shareholders have actually subscribed and paid for. It can be any amount up to the authorised limit. To issue shares beyond the authorised capital — say during a funding round — you must first increase the authorised capital (a board/shareholder resolution and an ROC filing with additional stamp duty), then allot. Confirm the increase procedure and fees.
A worked example
Example: a company has ₹10 lakh authorised and ₹1 lakh paid-up. It can issue up to ₹9 lakh more shares without changing the authorised capital. When an investor wants to put in ₹50 lakh of equity that would breach ₹10 lakh, the company first raises the authorised capital to (say) ₹1 crore, then issues the shares. Keeping authorised modest at the start saves stamp duty. Our team can manage capital changes.