Authorised Capital

◈Definition

Authorised capital — sometimes called 'nominal capital' or 'registered capital' — is the maximum nominal value of shares a company is permitted to issue to shareholders. It is set in the Memorandum of Association at incorporation and can only be increased by shareholder resolution and filing of Form SH-7 with the ROC. Authorised capital is a ceiling, not actual money raised. A company can have high authorised capital and low paid-up capital.

◉See also

• Paid-up Capital

  The amount of share capital actually subscribed and paid by shareholders.

• Subscribed Capital

  The portion of issued share capital that investors have agreed to take up.

• Form SH-7 (Capital Changes)(SH-7)

  The form used to notify the ROC of any change in a company's authorised share capital.

• Memorandum of Association(MOA)

  The constitutional document defining a company's name, objects, registered office state, and capital.

⬢Related guide

• Paid-up vs Authorised Capital — Explained

  Indian company filings always show two capital figures. Here's what each actually means and why the gap between them is a useful signal.