Authorized vs Paid-up Capital: The Difference Explained

Two capital figures appear when you register a company, and founders routinely mix them up: authorized capital and paid-up capital. Understanding the difference matters the moment you want to issue shares.

Authorized capital

This is the maximum value of shares your company is allowed to issue, as stated in its MOA. Think of it as the ceiling — you can't issue shares beyond it without raising the ceiling first.

Paid-up capital

This is the amount actually raised from shareholders by issuing shares. It's always less than or equal to the authorized capital.

Why it matters

• To bring in an investor beyond your authorized limit, you must increase authorized capital first (Form SH-7).
• Authorized capital affects your registration and later filing fees.
• Paid-up capital reflects the real money in your company.

Simple rule: authorized is what you're allowed to issue; paid-up is what you've actually issued. Plan your authorized capital with your next funding round in mind.

This article is for general information based on rules current at the time of writing and is not professional advice. Rules change — confirm specifics with a GovYapar expert before acting.