Two capital numbers appear in every incorporation form, and founders routinely confuse them. The difference affects fees, flexibility and fundraising mechanics.
Authorised capital: the ceiling
The maximum share capital your company is permitted to issue, stated in its charter. You pay registration fees scaled to this number, and raising it later requires a shareholder resolution and a filing with fees.
Paid-up capital: the reality
What shareholders have actually subscribed and paid. This is the money in the company — and there is no meaningful statutory minimum for private companies today.
Choosing the numbers at incorporation
- Set authorised capital comfortably above immediate plans — headroom for the next round costs little now and saves a filing later
- Keep paid-up realistic: enough to operate, not so much that founders strain to deposit it
The fundraising connection
Every new share issue must fit within authorised capital. Rounds get delayed by companies discovering mid-negotiation that they must first expand the ceiling — an avoidable filing at an unavoidable moment.
We size capital sensibly during incorporation — plan it with us.
