Paid-up capital
What Paid-up capital means, how it works, a worked example, the mistakes we see and the questions founders ask.
DefinitionPaid-up capital is the amount shareholders have actually paid to the company for the shares issued to them, and it cannot exceed the authorised capital stated in the MOA.
If a company has ₹10 lakh authorised capital and has issued 10,000 shares of ₹10 each that the founders paid for in full, its paid-up capital is ₹1 lakh. There has been no minimum since 2015, so ₹10,000 to ₹1 lakh is common at incorporation, but the money must genuinely reach the company's bank account before INC-20A is filed. Paid-up capital rises with every allotment: a funding round, a rights issue, ESOP exercise or a bonus issue. You meet it on the MCA master data, in AOC-4 and MGT-7A, in the small-company test (paid-up capital up to ₹4 crore), and in every cap table. What it means for you: keep share certificates, PAS-3 filings and bank proof for every allotment, because investors trace the paid-up capital history line by line.
How Paid-up capital works
Paid-up capital is the face value of the shares that have been issued and fully paid for. It rises with every allotment: the subscription at incorporation, each funding round, each ESOP exercise, a rights issue or a bonus issue. It never includes the premium; ₹2 crore raised on 2,000 shares of ₹10 at a ₹9,990 premium adds ₹20,000 to paid-up capital and ₹1.998 crore to the securities premium account.
The figure drives several thresholds. A small company is one with paid-up capital up to ₹4 crore and turnover up to ₹40 crore, which decides the annual return form, the cash flow statement exemption and the lighter penalties. A company secretary becomes mandatory at ₹10 crore paid-up capital, and the MGT-8 certificate at ₹10 crore or ₹50 crore turnover. Registrar fees on most forms follow paid-up or authorised capital.
Each allotment is reported on PAS-3 within 30 days (15 days for a private placement), share certificates are issued within two months, and the register of members is updated. The subscription money for the first shares must be received before INC-20A can be filed.
A Gurugram company incorporated with ₹1 lakh paid-up capital raises a seed round of ₹1.5 crore through 1,500 preference shares of ₹10 at a ₹99,990 premium. After the allotment its paid-up capital is ₹1,15,000, its securities premium ₹1,49,85,000 and it is still comfortably a small company for its annual filings. PAS-3 is filed within 15 days of the allotment.
Mistakes we see with Paid-up capital
- Quoting paid-up capital as the money the company has in the bank; the two part company from the first month of trading.
- Allotting shares before the subscription money is received, which the Act forbids for a private placement and which the auditor will flag.
- Forgetting PAS-3, so the Registrar's record of capital lags the share certificates and the next round's due diligence finds the gap.
Last updated 19 October 2026. Checked against the MCA, GST, Income-tax and Trade Marks rules in force for October 2026.
Where you will meet this term
Questions founders ask about Paid-up capital
What is the difference between authorised and paid-up capital?
Authorised capital is the ceiling on what the company may issue, written in the memorandum. Paid-up capital is the face value of shares actually issued and paid for. Paid-up can never exceed authorised.
Is there a minimum paid-up capital?
No. The former ₹1 lakh minimum for private companies was removed in 2015. Most companies start with ₹1 lakh because it is a round number that covers the first subscription, not because the law requires it.
Does share premium count as paid-up capital?
No. Premium goes to the securities premium account, which can be used only for the purposes in Section 52 (bonus shares, writing off issue expenses, buy-back and so on). Paid-up capital is face value alone.