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Explain the term- Authorised and Paid-up Share Capital
Number of shares of stock provided for in Articles of Association of a company is the authorized share capital. This figure is generally indicated in Share Capital section of the Balance Sheet.
Paid-up share capital is the capital which has been issued and subscribed by shareholders. Authorised capital is generally well in excess of the paid-up capital and a company can't legally issue more shares than authorized. Number of authorized shares can be changed only by amendment to Articles of Association for which a special resolution needs to be passed in the Annual General Meeting.
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