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Authorised vs Paid-Up Capital

Two numbers that get confused constantly. One is a ceiling you set; the other is money that actually came in. Tender authorities and investors look at the second.

The difference in one table

Authorised capitalPaid-up capital
What it isThe maximum share capital the company may issueThe value of shares actually issued and paid for
Where it is setIn the memorandumBy what shareholders have actually put in
Can it be changedYes, by resolution and filingChanges when shares are issued
Is it money in the companyNoYes — it was actually paid
What outsiders look atRarelyOften — tenders, banks, investors

A company can have authorised capital of Rs 1 crore and paid-up capital of Rs 1 lakh. That is entirely normal and it means one lakh actually came in. Quoting the authorised figure as though it were the company's capital is misleading, and anyone doing due diligence will spot it immediately.

Written 5 September 2026. Government requirements and portal behaviour change — message us to confirm before you rely on any date or figure here.

Where this matters commercially

Tenders. Eligibility conditions sometimes specify minimum paid-up capital or net worth. The authorised figure does not help you here, and a company that increased its authorised capital hoping to qualify has spent money on nothing.

Banks and investors. Both look at what was actually contributed and at net worth. Paid-up capital is part of that picture; authorised capital is not.

Issuing more shares. This is the one real constraint the authorised figure creates. You cannot issue shares beyond it, so bringing in an investor may require increasing it first — which is a resolution and a filing, and takes time you may not have mid-negotiation. See our page on increasing authorised capital.

Common questions

There is a cost to it and no benefit until you actually issue shares. Most small companies are better setting something reasonable and increasing it when there is a reason.

Increasing paid-up capital means shareholders actually putting money in and shares being issued. It is not a paper exercise. Whether that is worth doing for one tender is a commercial decision, and we will lay out what it involves.

Yes, there are fees that scale with the increase, plus stamp duty in some cases. Worth knowing the figure before deciding.

Where capital is stated, be clear which figure you are quoting. Presenting authorised capital as though it were paid-up is the kind of thing that damages credibility in due diligence.