Authorised Capital

Accounting for Companies Limited by Shares

MS: Modal Dibenarkan · EN: Authorised Capital · ZH: 法定股本

Meaning

Authorised capital is the maximum amount of share capital that a company is permitted to issue as stated in its registration documents. It shows the highest limit of capital that can be raised through the issue of shares. This capital is not recorded in the double entry because it is only a ceiling, not capital received.

Example

For example, Gemilang Berhad has an authorised capital of RM500,000 divided into 500,000 ordinary shares of RM1. The company may issue up to 500,000 shares only and cannot exceed this amount without amending its registration documents.

Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5

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