Paid-up vs Authorised Capital — Explained

The two capital numbers you'll always see

On every Indian company's MCA master record you'll see two separate capital figures: Authorised Capital and Paid-up Capital. These are not alternative names for the same thing. They measure two different concepts, and the relationship between them tells you something useful about how the company has funded itself.

Before we get into the details, here's the short version: authorised capital is the ceiling, paid-up capital is the actual. Authorised capital is how much share capital the company is legally permitted to issue; paid-up capital is how much shareholders have actually paid in.

What authorised capital means

Authorised capital is the maximum nominal value of shares a company is legally permitted to issue to shareholders at any point in time. This ceiling is set by the company's Memorandum of Association at the time of incorporation and can only be increased later through a formal procedure — a shareholder resolution, a filing of Form SH-7 with the ROC, and payment of the corresponding ROC fees.

The authorised capital figure does not mean the company has that much money. It just means the company has permission to raise up to that amount by issuing shares. Many Indian private limited companies are set up with authorised capital of ₹10 lakh or ₹1 crore as a default, regardless of how much capital they actually plan to raise in the near term.

What paid-up capital means

Paid-up capital is the amount that shareholders have actually subscribed and paid for. When a company issues shares to a founder, an investor, or an employee, and that person actually pays the price of those shares, the value of those paid shares is added to the paid-up capital.

Paid-up capital is the honest, observable measure of how much capital the company has raised from its shareholders. It is also the portion of capital that has been 'called up' — meaning the company has demanded payment — and received in full.

Why paid-up can never exceed authorised

Because authorised capital is a hard legal ceiling, paid-up capital can never exceed it — only equal it. If a company wants to issue more shares and its paid-up capital is already at the authorised limit, it must first increase its authorised capital through the formal ROC process before any additional issuance can happen.

In MCA master data, you'll sometimes see companies where the two figures are exactly equal. That means the company has fully utilised its authorised ceiling and would need to take a corporate action before issuing any more equity. It's a useful signal that the company may be preparing to raise its authorised capital or may be constrained in its ability to do a near-term fundraise.

What the ratio tells you

The ratio of paid-up to authorised capital is a simple but useful due-diligence signal. A company with paid-up capital of ₹1 lakh against authorised capital of ₹10 lakh has only called up 10% of its permitted capital — typical of early-stage private limited companies set up with headroom for future fundraising.

A company with paid-up and authorised capital both at ₹50 lakh has reached its ceiling. If you see this in a growth-stage company, it often means the company is about to go through an authorised capital increase to accommodate a new round.

A company with very high authorised capital and very low paid-up capital may have been set up with ambitious plans that did not materialise, or may just have defaulted to a large ceiling at incorporation for administrative convenience. Context matters.

Reading the numbers in context

On CorpIntel, both figures are shown on every company detail page. If you are researching a company, treat the paid-up capital as the real money in, and use the authorised capital to understand the issuance ceiling the company is operating under. Combined with the company's age, status, and director composition, these two numbers give you a quick read on how seriously funded the company is.

Remember that capital numbers are reported to MCA and lag real transactions by the time it takes to file. A recent fundraise may not yet be reflected in the master data. Always combine capital data with the filing history to understand when the most recent update was made.