What is paid-up capital?

Whenever you are preparing a legal file, you have to mention about the amount by which you started the business. The company receives an amount from the shareholders in the exchange for share stocks is known as paid-up capital. There could be various reasons for the issue of the shares of stocks including fund expansion etc.

To be more precise, it is the worth of the business. Moreover, the partners participate in this process according to their shares.

After the private limited company, a foreign company, or public limited company registration within 45 days the money has to be deposited in the bank. Furthermore, this is how you do the subscription with SECP. They have to be informed about this with evidence. Note that the money should be distributed from the personal accounts of the directors. If you do not submit the amount within 45 days of company registration, a notice will be issued to you by the government. For instance, if you are two directors and you keep your paid-up capital as 100,000. Then, each of you will have to deposit 50,000 in the company bank account. Also, note that the payment has to be done by your personal accounts. However, this example is only applicable when you have an equal amount of shares in the business.

In a more simpler way, paid-up capital is the amount which is paid by the shareholders to the company.

More information you need to know about paid-up capital..

• You do not need to repay paid-up capital! Hence, it is the ultimate benefit of this!
• The worth of the business can be examined by the capital. Also, it reveals the amount which the shareholders have paid to play! So, you can analyze if the administration has used the money appropriately.
• Paid-up capital vs Authorized capital… Irrespective of the paid-up capital the authorized capital is the capital which is the maximum amount of shares of the company.
• More flexibility over the finance… So it is made more appealing!!