Issued Capital

Definition: The Issued Capital refers to the number of shares issued by the company to the shareholders. In other words, the shares allotted or subsequently held by the shareholders is called the issued capital.

The Issued capital represents that part of an authorized capital, which a company is authorized to sell through the shares. A company can either sell all its shares or a portion of it depending on the need for finance. It is also called as a subscribed capital, as the number of shares purchased by the shareholders represents the amount of money invested in the firm.

For Example: If a firm has an authorized capital of Rs 50,00,000, where the price of each share is Rs 10. If a company receives an application for 10,00,000 shares, but instead the company issued 8,00,000 shares of Rs 10 each. Then the issued capital will be Rs 80,00,000 (8,00,000 x 10).

The Issued Capital represents the shares that have been issued to the shareholders and which still remains unpaid. Any share redeemed or repurchased by the company itself for the purpose of keeping it in the stock is not a part of such capital.

The value of the share capital changes with the issue of new shares to the existing or new shareholders. Also, the company may repurchase or redeem its shares that result in the change in the value of the subscribed capital.

Leave a Reply

Your email address will not be published. Required fields are marked *

Shares