Explain in brief the main categories in which the share capital of a company is divided.

Share capital of a company can be divided into the following categories 

(i) Authorised Capital: It refers to that amount which is laid down in clause of the memorandum of association of the company. This i maximum amount with which company is registered and to raise from the public by the issue of shares. The therefore, called the registered or nominal or authorised capital of company. 

(ii) Issued Capital: The authorised capital which is offered to the public for subscription including shares offered to the vendors for subscription other than cash is called the issued

(iii) Subscribed Capital: It is the portion of issued capital which has been subscribed to by the public i.e., applied for and allotted by the company. Thus, face value of allotted shares is known as subscribed capital. 

(iv) Called-up Capital: The portion of the subscribed capital which the shareholders are called upon to pay is termed as called up capital of the company. The company usually does not require a shareholder to pay in one lot, the full value of the shares he has subscribed for. He is generally required to pay it by instalments. The balance of subscribed capital which has not been called-up represents uncalled capital. 

(v) Paid-up Capital: The amount of called-up capital which has been actually paid by the shareholders is called as paid-up capital and the amounts yet due from the shareholders are called as calls-in-arrears. 

(vi) Reserve Capital: Sometimes a company by means of special resolution decides that certain portion of its uncalled capital shall not be called-up during its existence and it would be available as an additional security to its creditors in the event of its liquidation. Such a portion of uncalled capital is termed as reserve capital.

The division of the share capital of a company into main categories is diagrammatically explained below:

• Authorised Capital: It is anamount which is stated in the Memorandum of Association. It is the maximum amount that the company can raise by issuing shares. This maximum amount can be increased as per the procedures laid down in the Company Act. 

• Issued Capital: It is a part of authorised capital which is offered by the company tp the general public for subscription.

 • Unissued Capital: It is a part of authorised capital that is not offered till now but can be offered to the general public in future. 

• Subscribed Capital: It is a part of issued capital that is actually subscribed by the general public.

• Unsubscribed Capital: It is that part of the issued capital that is not subscribed by the public. 

• Called up Capital: It is a part of subscribed capital that is called up by the Directors from the shareholders of a company to pay. 

• Uncalled up Capital: It is that part of subscribed capital which is not called up till now but can be called up in future as per the need of the company. 

• Paid up capital: It is that part of called up share capital which is actually received from the shareholders.

• Reserved Capital: As per the Section 99 of the Company Act of 1956, a limited company may call up any portion of uncalled share capital in the event of winding up of the company to pay its creditors. This amount of uncalled share capital cannot be used for any other purpose and is reserved -for paying back the creditors that is why such portion of share capital is called reserve capital.