Q.What is authorized capital ?

Authorised capital, also called registered or nominal capital, is the maximum amount of capital a company is permitted to raise by issuing shares, as fixed by the capital clause of its Memorandum of Association. The company cannot issue shares beyond this amount without altering the memorandum.

Authorised Capital is the maximum amount of share capital that a company is authorised to issue to the public during its lifetime. It is stated in the capital clause of the Memorandum of Association at the time of incorporation and is therefore also known as registered capital or nominal capital. The company may issue shares up to this limit but not beyond it; to raise more, it must first alter the capital clause by following the legal procedure. Au …