Minimum Paid-Up Share Capital in a Private Company

The minimum paid-up share capital in case of a private company is 1 Lakh. Let us understand this in detail.

Definition of Paid-Up Share Capital

Paid-up share capital refers to the amount of money that a company has received from its shareholders in exchange for the shares they have issued. It is the actual amount of money that the company has received from its shareholders, and it is different from the authorized share capital, which is the maximum amount of share capital that a company is authorized to issue.

Minimum Paid-Up Share Capital in a Private Company

Under the Companies Act, 2013, the minimum paid-up share capital for a private company is 1 Lakh. This means that a private company needs to have a minimum of 1 Lakh rupees as its paid-up share capital at the time of incorporation.

This requirement was introduced to ensure that companies have a minimum amount of capital to carry out their business operations. However, it is important to note that the paid-up share capital requirement is only a minimum requirement, and companies can have a higher paid-up share capital if they choose to.

Consequences of Not Meeting the Paid-Up Share Capital Requirement

If a private company does not meet the minimum paid-up share capital requirement, it may face penalties and legal consequences. The Registrar of Companies (ROC) may also reject the company's application for incorporation if it does not meet the requirement.

Conclusion

In conclusion, the minimum paid-up share capital in case of a private company is 1 Lakh. Private companies need to ensure that they meet this requirement at the time of incorporation to avoid penalties and legal consequences.