Types of Share Capital (with Example)

Share capital comes in five stages: authorised (the maximum allowed), issued (offered to investors), subscribed (taken up by investors), called-up (asked for so far) and paid-up (actually received). Each is a part of the one before it. By class, share capital is either equity share capital or preference share capital.

Last reviewed: November 2026

Meaning of share capital

Share capital is the money a company raises by issuing shares. It is recorded at the face (par) value of the shares; any amount received above face value goes to securities premium, not share capital. A rise in the market price of shares does not change share capital.

A company cannot issue more share capital than its authorised capital. Share capital appears on the balance sheet under Equity (Shareholders’ Funds), with details in the notes.

Types of share capital

1. Authorised capital

The maximum share capital a company may issue, as stated in its memorandum of association (Section 2(8), Companies Act, 2013). It is also called registered or nominal capital. A company can raise it later by ordinary resolution if its articles allow, and must file a notice with the Registrar of Companies within 30 days.

2. Issued capital

The part of authorised capital that the company actually offers to investors for subscription (Section 2(50)). The rest is unissued capital, which can be issued later as the company grows.

3. Subscribed capital

The part of issued capital that investors actually take up (Section 2(86)). Subscribed capital can be equal to issued capital or less than it, but never more. If the issue is over-subscribed, the company allots only the shares it issued and refunds or adjusts the extra money.

4. Called-up capital

Companies often collect the share price in instalments: application, allotment and one or more calls. Called-up capital is the part of subscribed capital the company has asked shareholders to pay so far (Section 2(15)). The part not yet asked for is uncalled capital.

Textbooks also mention reserve capital: the part of uncalled capital that a company has decided, by special resolution, to call only if it is wound up. It cannot be used while the company is running.

5. Paid-up capital

The part of called-up capital that shareholders have actually paid (Section 2(64)).

Formula: Paid-up capital = Called-up capital − Calls in arrears

Calls in arrears is money called but not yet paid. Money paid before it is called (calls in advance) is not part of paid-up capital; it is shown under other current liabilities until the call is made.

The order always holds: Authorised ≥ Issued ≥ Subscribed ≥ Called-up ≥ Paid-up.

Also read: Authorized Share Capital – Meaning & Example

Equity and preference share capital

Section 43 of the Companies Act, 2013 allows a company limited by shares to have two kinds of share capital.

Each of the five stages above applies to each class separately. A company might, for example, have authorised equity capital of ₹5 crore and authorised preference capital of ₹1 crore.

Example of different types of share capital

ABC Ltd is registered with an authorised capital of ₹1,00,00,000 divided into 10,00,000 equity shares of ₹10 each. It issues 8,00,000 shares, but investors subscribe for only 6,00,000. The company calls ₹4 per share so far and receives the call money on 5,50,000 shares only.

How it is shown in the balance sheet

Under Schedule III to the Companies Act, 2013, the notes to accounts show share capital like this:

Only ₹22,00,000 goes on the face of the balance sheet under Equity → Share capital. If shares are fully paid, they are shown as “subscribed and fully paid”.

Also read: Call in Arrears – Meaning and Example

Common exam mistakes

• Showing authorised or issued capital as the balance sheet figure. Only paid-up capital (subscribed capital called up, less calls in arrears) goes on the face of the balance sheet.
• Adding calls in advance to share capital.
• Including securities premium in share capital. It goes to Reserves and Surplus.
• Taking subscribed capital as the number of shares applied for in an over-subscribed issue. It is the number of shares allotted.
• Calculating called-up capital on issued shares instead of subscribed shares.

FAQs

What are the 5 types of share capital?

Authorised, issued, subscribed, called-up and paid-up capital. By class, share capital is equity or preference.

What is the difference between authorised and paid-up capital?

Authorised capital is the ceiling set in the memorandum. Paid-up capital is the money shareholders have actually paid on the amounts called.

Can subscribed capital be more than issued capital?

No. Even if investors apply for more shares, the company allots only what it issued, so subscribed capital is at most equal to issued capital.

Is there a minimum paid-up capital for a company in India?

No. The Companies (Amendment) Act, 2015 removed the minimum paid-up capital requirement for private and public companies.

Where is share capital shown in the balance sheet?

Under Equity and Liabilities → Equity (Shareholders’ Funds) → Share capital, with the breakdown in the notes to accounts.

This article is for general learning. For exams, follow your syllabus and textbook; for business decisions, consult a qualified accountant.

Author: Vikas Yadav

Vikas Yadav founded MonetarySection.com in 2014 and is responsible for everything published on it. He holds an MBA from NCU (formerly ITM), Gurugram, and writes about accounting, payroll and personal finance for Indian readers. Facts and figures are checked against official sources such as the Income Tax Department, RBI and IRDAI. View all posts by Vikas Yadav