Does paid-up capital need to be in the bank on day one?

Authorised capital vs paid-up capital: how much to start with

1 min read

When you register a company, you choose two numbers: authorised capital, the maximum the company may issue, and paid-up capital, what founders actually put in. Getting them right keeps registration cheap and leaves room to grow.

The four kinds of capital

Term	Meaning
Authorised	The ceiling on shares the company can issue, stated in the MOA
Issued	Shares the company has offered
Subscribed	Shares that people have agreed to take
Paid-up	The amount actually paid for subscribed shares

At incorporation, issued and subscribed capital are usually equal to the shares taken by the subscribers in the MOA.

How to choose

There is no minimum paid-up capital. ₹10,000 to ₹1 lakh is common for a bootstrapped start.
Keep authorised capital at or below the level where MCA fees are waived (currently ₹15 lakh), unless you need more now.
Stamp duty rises with authorised capital, so don't over-authorise.
Leave headroom above paid-up capital so you can issue shares to a co-founder or early angel without an immediate increase.
Face value of ₹10 per share is common; ₹1 makes splitting equity easier.

You can always increase authorised capital later. See SH-7.

Frequently asked questions

Subscribers must pay for their shares and the company files INC-20A within 180 days, so plan to deposit it once the bank account is open.

This guide is general information, not legal advice. Government fees and procedures change; confirm current figures before you file.