Q.Explain the different kinds of share capital of a company, with their meaning.

A company's share capital is described in several nested layers, each narrower than the one before, moving from what it may legally raise down to what it has actually collected.

Authorised Capital is the maximum a company may raise as per its Memorandum. Issued Capital is the part actually offered to the public. Subscribed Capital is the part actually taken up by investors. Called-up Capital is the part demanded for payment so far, and Paid-up Capital is the part actually received. Reserve Capital is a part of the Uncalled Capital reserved, by special resolution, to be called only on winding up.

A company's share capital is not a single figure — it is described through a hierarchy of terms, each capturing a different stage between what the company may legally raise and what it has actually received in cash:

1. Authorised (Nominal/Registered) Capital — the maximum amount of share capital a company can ever raise, as fixed in its Memorandum of Association; it can only be increased by following the statutory procedure (special resolution/registrar filing).
2. Issued Capital — the part of the authorised capital that the company has actually offered for subscription to the public or existing members.
3. Subscribed Capital — the part of the issued capital that has actually been applied for and allotted to investors (issued capital may exceed subscribed capital in the event of under-subscription).
4. Called-up Capital — the part of the subscribed capital that the company has so far demanded payment for, through application, allotment, and any calls made.
5. Paid-up Capital — the part of the called-up capital actually received in cash from shareholders; Paid-up Capital = Called-up Capital − Calls in Arrears.
6. Reserve Capital — a part of the uncalled capital that the company, by special resolution, decides not to call up except in the event of, and for the purposes of, winding up; it protects creditors by ensuring a buffer of capital remains callable only in liquidation.

Each of these terms narrows the figure before it: Authorised ≥ Issued ≥ Subscribed ≥ Called-up ≥ Paid-up, with Reserve Capital carved separately out of the Uncalled Capital. A company's published Balance Sheet (Notes to Accounts) always discloses each of these figures for share capital, so a reader can see exactly how much of the company's legal ceiling has actually been converted into cash.

Students often confuse Issued Capital with Subscribed Capital, treating them as identical — they are the same only when the issue is fully subscribed. In a case of under-subscription, Issued Capital will be larger than Subscribed Capital, and this distinction is frequently tested.