What is Paid Up Capital?
Paid up capital is the amount of capital for which a business has received payment from shareholders.
Paid Up Capital Example
A business is formed with an authorized capital of 100,000 shares of 15.00 each, which is the maximum number of shares the business can issue. The business issues shareholders with 80,000 shares of 15.00 each resulting in an issued capital of 1,200,000, but only initially calls for 10.00 a share giving a called up capital of 800,000.
If all the shareholders pay for their shares then the paid up capital will be the same as the called up capital which is 800,000. However, if for example, only 70,000 shares have been paid for, then the paid up capital will be 70,000 x 10.00 = 700,000.
Authorized capital = 100,000 x 15.00 = 1,500,000 Issued capital = 80,000 x 15.00 = 1,200,000 Called up capital = 80,000 x 10.00 = 800,000 Paid up capital = 70,000 x 10.00 = 700,000 Called up capital not paid = 10,000 x 10.00 = 100,000.
For further information see the Wikipedia definition.
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