In the previous post, we have learned about the procedure of a company going for an IPO. Now let us learn about different types of Capital.
So, taking the example of our boutique, if it is going for an IPO, then it has to get registered with SEBI. The total amount of money which is required for a boutique to get registered with SEBI. In other words, Authorized Capital is the maximum amount of money (Capital) a boutique(Company) can raise shares.
Issued Capital
This is a capital which is issued to the shareholders.
Subscribed Capital:
This a capital which has been given to the subscribed users of the shares.
Let me quote an example here. Suppose, if our boutique has ensued 100 shares, there might be 50 people who are interested to buy those shares and they try to put an application to hold the share.
Out of 50, only 30 might purchase those shares. So, here, the 50 people are subjected to Subscribed capital and the 30 are subjected to the issued capital.
Called up Capital:
Some people who keep an application to hold the shares might not pay the complete amount (issued capital) to get the ownership of the shares. Such type of a capital is known as called up Capital.
Paid up Capital
This capital is earned by the boutique when a company sells its shares in the market.
It is the amount which is received by the company when the shares are sold away to the shareholders
In a nutshell, a capital either it is a shareholders or company’s board members will be written on a balance sheet. The specialty of a shareholder capital is that a common man like you and me can become an owner of a company if he/she holds shares of a particular company.
Debt is an important element of a balance sheet. Isn’t it? So, how a debt is managed and what actually a debt is? Will be told in the coming articles
• My next posts will explain about short-term debts and long-term debts and the difference between the liabilities and debts.
Until then,
Have a great time. 😊😊😊😊
Sneha Polapragada 💓💓💓💓
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