Difference
between authorized and issued Capital
1. Authorized Capital
Authorized capital is the
maximum amount of capital that can be issued to public by the company. Authorized
capital is mentioned in the incorporation document of the company. Authorized capital
amount is decided keeping in view the future capital requirement of the company.
Issued capital can be raised up to authorized capital.
2. Issued Capital
The amount of capital
issued to public is known issued capital. The issued capital sometime known as
paid up capital. Amount of issued or paid up capital cannot exceed the amount
of authorized capital.
Example
of authorized and issued capital
Entity incorporated under
the companies’ act 2002, and has authorized capital of 100 million. The company decided to issue 800,000 shares @
100 each, and then in this case the issued or paid capital would be 80 million against
authorized capital of 100 million.
