Paid Up Capital
Updated on March 17, 2023
One of the purposes of an IPO is to increase the company’s share capital through public participation. One of the categories of share capital of a company is called paid-up capital.
Paid-up capital is the amount that a company receives on its shares issued and subscribed by investors from the primary market. The paid-up capital can be less than or equal to the authorized capital it cannot be more than authorised capital.
What does paid-up capital include
The paid-up capital of a company is closely analysed by potential investors as it gives information of the existing capital employed in the company and how effectively it is utilized.
The paid-up capital can be made up of partly paid shares or fully paid shares. Party paid-up capital means that the company will receive an additional amount from the shareholders to the extent that its shares are unpaid.
Fully paid-up capital means that there is no amount due from the shareholder.