Two capital figures appear on every company's records — authorised capital and paid-up capital. They are often confused, but they mean very different things.
This guide explains the difference and how to increase authorised capital when you need to issue more shares.
What is Authorised Capital vs Paid-up Capital?
Authorised capital (or nominal capital) is the maximum value of shares a company is allowed to issue, as stated in its MOA. Paid-up capital is the value of shares actually issued and paid for by shareholders.
A company can have paid-up capital up to, but not exceeding, its authorised capital. To issue more, it must first increase the authorised capital by altering the MOA.
| Authorised capital | Maximum shares the company can issue |
|---|---|
| Paid-up capital | Shares actually issued and paid for |
| Increase authorised | Board + shareholder approval, file SH-7 |
Frequently asked questions
Can paid-up capital exceed authorised capital?
No. Paid-up capital can never exceed authorised capital; you must increase the authorised capital first.
How do I increase authorised capital?
Pass a board and shareholders' resolution, alter the MOA, and file Form SH-7 with the ROC along with fees.