Authorized Capital

This is the maximum amount of capital for which a company issues shares to shareholders. It stipulates that a company cannot receive more capital than this amount.

• A company's authorized capital is defined in its Memorandum of Association (MOA).
• A company can increase or decrease its authorized capital through formal processes. 
• A company can issue less than its authorised capital.
• A company's authorised capital differs from its raised amount.

For ex. Lalit Pvt Ltd has Rupees 25 Lac as Authorised Capital.