Can You Tell Me Nature Of Capital And Its Kinds?

The nature of words the capital means a particular amount of money with which a business is started. In case of company, the term share capital refers to the amount of money raised by issue of shares.

Kinds of capital,Authorized capital is the maximum amount of share capital, which a company is authorized to issue. The full amount or part of it can be issued for subscription and the balance can be issued whenever the need arises. Issued capital is not necessary for a company to issue all its authorized capital to the public for sale. Subscribed capital is not necessary that the public may purchase all the capital issued by the company. Called up capital is generally, the companies do not ask to the shareholders to pay the full amount of share at once. They take it in installments.

          Paid up capital is that part of called up capital, which is actually received by the company in the form of cash, If some share holders could not pay all the money of called up capital the amount remaining in arrears is called the calls in arrears. Reserve capital is that part of the uncalled capital which the company has by a special resolution decided not to call up, until the company is wound up. A company can obtain the redeemable capital by issuing participation term certificate and other security not based in interest other than ordinary share of a company.