The authorised capital of a company is the maximum amount of share capital for which shares can be issued by a company. It is mentioned in the Memorandum of Association of the Company and is usually Rs. 1 lakh. The company can increase the capital at any time with shareholders approval and by paying an additional fee to the Registrar of Companies.
Eg: If a Private Limited Company has an authorized capital of Rs.10 lakh, it means that ABC Private Limited Company can issue shares worth up to Rs.10 lakhs to its investors.. However, the Company can still issue shares worth less than 10 lakhs to its investors as the company has not issued shares in excess of the authorised capital.
