shiva metals ltd was formed with an authorised capital
LectureNotes said Shiva Metals Ltd was formed with an authorised capital. What does that mean?
Answer:
When someone says that a company, such as Shiva Metals Ltd, was formed with an authorized capital, they are referring to the maximum share capital that the company is legally allowed to issue to its shareholders. This figure is typically stated in the company’s founding documents (often called the Memorandum of Association in certain jurisdictions). Below are some key details and clarifications:
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Definition of Authorized Capital
- Authorized capital (also known as nominal or registered capital) is the highest amount of share capital a company can issue to its shareholders.
- It does not necessarily mean the entirety of the authorized amount has been issued or paid by shareholders; it only sets the upper limit.
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Relevance for Incorporation
- The authorized capital amount is generally declared at the time of company formation and can be altered later following certain legal procedures.
- Companies in many countries, including India, must specify their authorized capital when they register.
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Possible Variation
- Shiva Metals Ltd may not have used all of its authorized capital initially; over time, a company can issue shares in multiple rounds up to its authorized limit.
- If more capital is needed, the company can increase its authorized capital (with shareholder and regulatory approval).
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Accessing Official Information
- For the most accurate and up-to-date details on Shiva Metals Ltd’s formation documents, authorized capital, and current capital structure, you would typically consult the official government records or the company’s filings. In India, for example, these documents can be accessed through the Ministry of Corporate Affairs (MCA) portal.
Below is a summary table for clarity:
| Term | Meaning |
|---|---|
| Authorized Capital | The maximum amount of share capital a company can issue to its shareholders, as stated in the company’s founding documents. |
| Issued Capital | The portion of authorized capital that has actually been issued (sold) to shareholders. |
| Paid-up Capital | The amount shareholders have actually paid for their issued shares, which may be the same as or less than the issued capital. |
| Memorandum of Association | A legal document detailing a company’s objectives and the scope of its authorized share capital. |
| Increased Authorized Capital | Companies can increase their authorized capital by following legal procedures, often requiring shareholder and regulatory approvals. |
If LectureNotes mentioned that “Shiva Metals Ltd was formed with an authorised capital,” this statement simply highlights the nominal amount of shares they were entitled to issue when the company was established. For specific figures or more recent updates, checking publicly available filings is recommended.
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