WHAT IS THE DIFFERENCE BETWEEN AUTHORIZED SHARE CAPITAL AND PAID-UP SHARE CAPITAL?

Authorized Share Capital is the amount of shares that a company is authorised to issue and it forms no part of the actual Paid-up Share Capital of the company. In layman term, Authorized Share Capital is basically the company's  quota for share issuance.  Whereas, Paid-up Share Capital is the actual shares of the company issued to its shareholders after consideration for the shares, be it cash or non-cash, have been deposited with the company.

In practical term, it is the Paid-up Share Capital of a company that is important because that forms part of the capital of a company.  In many countries, the concept of Authorized Share Capital have been abolished as it is found to be redundant (for example, Singapore). However, Malaysia is one of the countries that still retain the concept.

Note : On 31 January 2017, Malaysia has introduced Companies Act 2016 and the concept of Authorized Share Capital has been abolished.