Saturday, 12 August 2017

What is meant by the authorized capital in case of private limited company i.e is 1 lakh rupees ?


                                          

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When a Private Limited Company is incorporated, the promoters of the company must decide on the amount of authorized capital for the company and the value of shares they will receive in return for their investment in the company.

The minimum capital required for private limited company formation is abolished since 2013 in India. Even if the private limited enterprise shows share capital of Rs. 1 Lakh at the time of formation.

Authorized Capital
1. All new companies must authorize a minimum amount of capital, which:
a. For private limited companies and OPCs is Rs. 1 lakh;
b. and for public limited companies is Rs. 5 lakh.

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