Difference between Issued and paid up Capital

Difference between Issued and paid up Capital

Issued capital is the number of share issue to public for subscription and the paid up capital the number of share public subscribed for. Theoretically number of share subscribed (paid up) may be less than number of shares issue for subscription.

Practically issue and subscription share capital are equal because the broker guarantees to take unsubscribed capital and broker offer this guarantee against a fees which is commonly as underwriting commission.

Example of paid up capital

ABC Company issued capital 100,000 shares @ 10 per share. How the transaction will be recorded in books of accounts.

Cash A/C             1,000,000 (Dr)

Capital A/C         1,000,000 (Cr)