Meaning of subscribed share capital:
Subscribed share capital is that part of issued share capital for which a company has positively received subscription from the investors.
In simple words, when a company issues shares to raise fund, it may or may not find the investors for all of its shares. Thus, the part of issued share capital for which company has successfully found the subscribers is known as subscribed share capital.
Let’s assume that ABC ltd. is registered with a total authorized share capital of INR 1,00,00,000 divided into shares of INR 10 each. The management issues 8,00,000 shares to raise a fund of INR 80,00,000. However, the investors subscribe for only 6,00,000 shares. The company calls for INR 4 per share out of INR 10 (nominal value of shares) and it receives the amount for only 5,50,000 shares.
|Authorized share capital||1,00,00,000|
|Issued share capital (8,00,000 × 10)||80,00,000|
|Subscribed share capital (6,00,000 × 10)||60,00,000|
So, from the figures given above, it is clear that the subscribed capital for ABC Ltd. is INR 60,00,000. It means that out of 8,00,000 shares, investors have subscribed only for 6,00,000 shares.