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In economics, capital, capital goods, or real capital are factors of production used to
create goods or services that are not themselves significantly consumed (though they
may depreciate) in the production process. Capital goods may be acquired
with money or financial capital.
In finance and accounting, capital generally refers to saved-up financial wealth,
especially which used to start or maintain a business. A financial concept of capital is
adopted by most entities in preparing their financial reports. Under a financial concept of
capital, such as invested money or invested purchasing power, capital is synonymous
with the net assets or equity of the entity. Under a physical concept of capital, such as
operating capability, capital is regarded as the productive capacity of the entity based on,
for example, units of output per day.
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This represents obligations, and is liquidated as money for trade, and owned by
legal entities. It is in the form of capital assets, traded in financial markets. Its market
value is not based on the historical accumulation of money invested but on the perception
by the market of its expected revenues and of the risk entailed.

 
 

This is inherent in ecologies and protected by communities to support life, e.g., a river
that provides farms with water.
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It is non-natural support systems (e.g. clothing, shelter, roads, and personal computers)
that minimize need for new social trust, instruction, and natural resources. (Almost all of
this is manufactured, leading to the older term manufactured capital and its value would
be described with its appreciation/depreciation process, rather than its original value:
Most of natural capital grows back; infrastructural capital must be built and installed.
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uelational capital: All relations a company entertains with external subjects, such as
suppliers, partners, clients, research centre. etc.;
Human capital: The sum total of the useful knowledge of your employees and your
customers with more emphasis on knowledge and competences residing with the
company's employees;
Organizational capital: Collection of potential rewards such as patents, copyright,
and trademark instruments are part of this type capital.
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A huge amount of capital is required to start the business.
As no one can contribute the whole amount required, the company divides it into the
parts of a very nominal amount, say us.10 or us.100 these are known as ³Shares´.
To raise the required amount of capital the company issues the shares to the general
public. Therefore a capital of company is called Share Capital´




  

1.p Authorized capital
2.p Issued Capital
3.p Subscribed Capital
4.p Called up Capital
5.p Un-called up Capital
6.p Paid-up Capital
7.p ueserved Capital
8.p Fixed Capital
9.p Circulating Capital
    


Authorized Share capital is the amount of share capital with which a company is
registered.
It is disclose under the capital clause in the memorandum of association of the company.
It is the Maximum Amount of the Share Capital Which can be ever issued by the
company.
There is no limitation on the Amount of the Authorized Share capital.
It is also know as uegistered Capital and Nominal Capital.
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The Nominal Value of that part of the Authorized capital which has been offered for
subscription to the public is called the issued capital.
It is issued in parts at different times of incorporation of the company.
It is that part of the authorized capital of the company which is issued for the cash or for
consideration other than cash.

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It is that part of the Authorized shared capital which is allotted for the cash or for
consideration other than cash.
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a)p The public may send the application for the same number of shares as issued by
the company.
b)p The application sent by the public are more that the issued share capital by
company, which is called over subscription.
c)p The number of application received from public may be less that the issued by the
company which is called under subscription.
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The called up capital is that part of the share capital which has been called up by the
company.
The remaining part of the value of the share capital is called uncalled capital.
The amount of the share is called in the installment at different times as per the need of
the company.

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The amount which has not been Called for an each Share or the amount Outstanding on
each Share is called the ³uncalled Capital´.
Eg:-
If a company has so far called up uS: 5/- on every equity share of us10/- the balance of
us 5/-outstanding on each share is called the Un-called Capital

   



The Amount that has actually been paid up by the shareholders is called Paid up Share
Capital.

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A company limited by Share may, by passing a special resolution, create reserve capital
out of its uncalled capital that shall not be called from the shareholder except in the event
of winding up of the company.
Once the reserve capital is created, it cannot be converted into equity share capital,
without the permission of the Court.

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Fixed Capital is the capital that company retains in the shape of fixed assets, such as land
and building, plant and machinery, furniture, goodwill, etc.
Upon which the subscribed capital had been expanded and such assets being utilized by
the company to produce income or gain profits.

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It is a portion if the subscribed capital of the company intended to be used by being

temporarily parted with, and circulated in business in the form of using goods or other
assets such as book debts, bill receivable, investments, cash, bank, balance, etc.
Which are intended to return to the company with an increment and to be used again

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A public company starts its business with a certain amount of share capital. After a
certain period it may need to alter it, to reduce or increase or reorganize it. According to
section 94 of the limited by guarantee with a share capital, are empowered to make
concerned company permit to do so. According to section 94(1) a company with a limited
liability and having a share capital can alter its capital in any ways of the following:

     

 A company may increase its share capital by issuing new
shares. This increase may be of two types:

  
   According to section 81 of the Indian companies
act, 1956, a company may issue the unissued shares within its authorized capital at any
time it needs. For this a company will not have to make any alteration in its memorandum
of association or articles of association. The Board of directors may issue the unissued
part of their authorized share capital only by passing a resolution at their meeting, if they
are authorized to do so by their articles of association.

     
 A company incorporated with certain amount of
authorized share capital can, if it requires, increase its amount also by specific legal
procedure.
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 A company may consolidate the
whole amount or any part of its existing share capital into the share of large
denominations. For example, if a company is having share capital, divided in the share of
us.10 each, it may consolidate them into the share of us.100 each. The number of shares
will be reduced to 1/10th of existing number of shares in this case. It may also sub-divide
the whole or any part of share capital into the shares of smaller denominations. For
example, if a company is having share capital divided into shares of us.100 each, it may
sub-divide it into shares of us.10 each. In this case, the number of shares will be 10 times
of the existing number.
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 & A company may convert its fully paid up shares into
stock or stock into shares. This can be done only in respect of the fully paid up shares.

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    A company can cancel all the shares which have not
been subscribed for by any one and the company has not received the acceptance of any
one for them. Such cancellation of unissued shares is not treated under companies Act.
The object of such cancellation may be to get rid of unissued shares.

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According to Section 94 a public company, limited by shares and a public company

limited by guarantee, having share capital may alter their share capital. For making such
alteration, the company is to follow the following legal procedure:

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A company must be authorized to do
so in its articles of association. Even if a company is not empowered to do so by its
articles of association, it may very well do so making the alteration in its articles of
association, first. This can be done by the company by passing a special resolution in its
general meeting.

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 According to Section 94(2) a company should pass an ordinary
resolution for making an alteration in its share capital. The permission of court or central
government is not required for a company to make the alteration in its share capital.

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is under obligation to inform the uegistrar of Companies about the alteration in its share
capital within 30 days of such changes. The registrar will make the necessary changes in
the memorandum of association or articles of association of the company on the basis of
this information.
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  According to Section 95(3), if the required information is not
sent to the registrar along with a copy of resolution, the company and every officer of the
company, in default may be penalized with a penalty up to us.500 per day for the period
of mistake.

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 According to Section 94(1) and 94A (2) of
the Companies Act, 1974 there is no need of passing a resolution fro alteration of
authorized share capital if it is increased by the reason of:

a)p An order made by the central government for conversion of any loan or
debentures into the shares of company.
b)p An order made by the central government on application of any public financial
institute, which proposes to convert any loan or debentures into the shares of
company.