Minimum Paid-up Share Capital in Case of a Public Company
The minimum paid-up share capital required in case of a public company is 5 Lakhs. This means that the company must have at least 5 Lakhs worth of shares issued and paid for by its shareholders.
Here are the key points to remember about the minimum paid-up share capital for a public company:
1. Definition: A public company is a type of company that offers its shares to the general public and is listed on a stock exchange.
2. Legal Requirement: As per the Companies Act, 2013, a public company must have a minimum paid-up share capital of 5 Lakhs or such higher amount as may be prescribed.
3. Memorandum of Association: The Memorandum of Association of a public company must specify the amount of share capital with which the company is registered. This amount should be at least 5 Lakhs.
4. Capital Structure: The share capital of a company is divided into shares of fixed value. The shareholders of the company contribute towards this share capital by purchasing shares.
5. Importance of Paid-up Share Capital: The paid-up share capital represents the actual amount of money that has been paid by the shareholders for the shares they hold. It is an important indicator of the financial strength and stability of a company.
6. Utilization: The paid-up share capital can be utilized by the company for various purposes such as business expansion, investment in assets, repayment of debts, and meeting working capital requirements.
In conclusion, the minimum paid-up share capital in case of a public company is 5 Lakhs. This requirement ensures that the company has a sufficient financial base to operate and meet its obligations to the shareholders and other stakeholders.