Calculate paid up capital | paid up capital meaning (Gurgaon)

Calculate paid up capital | paid up capital meaning

Every share of a stock is supplied along with a base price, termed as the par. Usually, this value is kept low. So, any sum provided by the investors that tops the value of par is counted as a paid-up capital above par. While entering on the balance sheet, the value of par of supplied shares is registered as the preferred stock or the common stock. This will be filled under the column of stockholder equity. To make it clearer here is an example; if a company arranges an authorized capital of Rs 1cr and the value for every share is priced at Rs 10. The company then gets applications for 8L shares, but it registered only 1Cr shares of Rs 8 each. So, if all the needs of stockholders get met then the paid-in capital will become 80L. This helps us understand that the company is being funded by 80L via the stockholders depending on the number of shares bought by them. The capital that is left, i.e., Rs 20L, can be raised by the company at any given point in time. The Paid-up capital formula is: Paid Up Capital = No. of Equity Shares Issued by the Company * Portion of Face Value of Share called up. Let?s take an example, suppose a company ABC Ltd. whose Authorized Share Capital is 100, 0000 equity Share of Face Value Rs. 20. It has issued 1, 000 equity shares to the public and has called Rs. 10 per share. Here Paid-Up Capital = 10, 000 * 10 =10, 000 Therefore, the Paid-Up Share Capital of ABC Ltd. is Rs. 10, 000.