How Do You Spell AUTHORIZED CAPITAL?
Pronunciation: [ˈɔːθəɹˌa͡ɪzd kˈapɪtə͡l] (IPA) 
Pronunciation: [ˈɔːθəɹˌa͡ɪzd kˈapɪtə͡l] (IPA)
Authorized capital, also known as registered capital or nominal capital, refers to the maximum amount of shares that a company is allowed to issue or sell to its shareholders. It is the total value of shares that a company is authorized to issue, as stated in its constitutional documents, such as the memorandum and articles of association.
The authorized capital represents the legal limit to the amount of shares a company can issue, which serves as a protective measure for the shareholders and creditors of the company. It provides a framework for the company's potential future growth and expansion, as well as the flexibility to raise additional funds if required.
The authorized capital sets the ceiling for the total equity that a company can have, but it does not reflect the actual amount of funds the company has or plans to raise. It merely indicates the maximum capital that can be generated through the issuance of shares. The actual issued capital, also called the subscribed capital, refers to the shares that have been sold or allotted to shareholders.
To increase the authorized capital, a company must follow the legal and regulatory requirements, which may involve seeking approval from the shareholders or relevant authorities. It is important for companies to regularly review and assess their authorized capital to ensure that it aligns with their current and future financial needs and objectives.
The term "AUTHORIZED CAPITAL" is comprised of two words: "authorized" and "capital".
The word "authorized" is derived from the Old French word "autoriser" and the Latin word "authorizare", meaning to give authority or permission. This derives from the Latin word "auctor", meaning "one who causes to grow" or "promoter".
The word "capital" is derived from the Latin word "caput", which means "head" or "top". In Latin, "capitale" referred to "capital punishment", indicating the literal sense of a life or head being taken. Over time, "capital" developed broader meanings, including "wealth" or "assets" because important economic activities often centered around the "head" or "top" of society.
