What does called up share capital mean?
What is called up share capital?
Called up share capital is the part of a company's share capital that shareholders have been asked to pay. Section 547 of the Companies Act 2006 defines it as the total of the calls made on shares, whether or not paid, plus any share capital paid up without being called and any share capital due on a fixed future date.
It is measured at nominal (par) value. If a founder buys 100 shares of £1 each, called up share capital is £100, even if the company is later worth millions. Any amount paid above nominal value goes to a separate share premium account, also under capital and reserves.
Called up, paid up and unpaid
| Term | Meaning |
|---|---|
| Allotted (issued) share capital | Nominal value of all shares given to shareholders |
| Called up share capital | The part the company has asked shareholders to pay |
| Paid up share capital | The part actually received |
For most small private companies all three are the same small number. Where shares are issued but not yet paid for, the gap is an asset: shareholders owe the company money. Shareholders in a company limited by shares are liable for any amount unpaid on their shares, and nothing more (Companies Act 2006, s3).
Where it sits on the balance sheet
Called up share capital is item K.I, the first line under "Capital and reserves", in the balance sheet formats of Schedule 1 to the Small Companies Regulations (SI 2008/409). Below it come share premium, revaluation reserve, other reserves and the profit and loss reserve.
The unpaid amount appears separately as an asset called "Called up share capital not paid". The regulations allow it either at item A, the very first line of the balance sheet above fixed assets, or within other debtors in current assets. Micro-entity accounts use the same item A heading, while showing capital and reserves as a single total, so the share capital figure is often only visible in the iXBRL data or the confirmation statement.
Worked example
Example (illustrative figures, not a real company):
| Balance sheet line | £ |
|---|---|
| Called up share capital not paid | 99 |
| Net current liabilities | (4,099) |
| Net liabilities | (4,000) |
| Called up share capital | 100 |
| Profit and loss account | (4,100) |
| Total equity | (4,000) |
Two founders took 100 £1 shares; one has paid £1 and the other still owes £99. The £99 is an asset because the company can demand it. Losses of £4,100 have wiped out the share capital and left net assets negative. Called up share capital still shows £100: losses sit in the profit and loss reserve instead.
Why it is not a cushion for creditors
Share capital is a record of what shareholders originally committed, not money set aside. The £100 was probably spent in the first month. What protects a creditor is net assets and cash, not the share capital line.
Limited liability works against creditors here too. Once shares are fully paid, shareholders owe nothing more, however large the company's debts. A company with £1 of share capital and £200,000 of trade debt is legal and common. Public companies are different: they need at least £50,000 of allotted share capital, at least a quarter paid up.
Our data shows how often the cushion is thin or gone. Of 3,575,087 active UK companies with recent machine-readable accounts, 18.8% report negative net assets: their losses exceed share capital and any other reserves. See how many UK companies have negative net assets.
To see a company's share capital and equity across its filings, search the company.
Sources
- Companies Act 2006, section 547 (definition of called-up share capital)
- Companies Act 2006, section 3 (limited by shares)
- Companies Act 2006, section 763 and section 586 (public company minimum capital)
- The Small Companies and Groups (Accounts and Directors' Report) Regulations 2008, Schedule 1 (balance sheet formats)
FAQ
What is the difference between called up and paid up share capital?
Called up share capital is what the company has asked shareholders to pay on their shares; paid up share capital is what they have actually paid. If a shareholder has been called on for £100 and has paid £60, called up is £100, paid up is £60 and the £40 is shown as called up share capital not paid, an asset of the company.
Why is called up share capital only £1 or £100?
Most private companies are formed with a handful of shares at £1 nominal value, because there is no minimum share capital for a private company and a low figure keeps things simple. The number says nothing about how much money the owners have put in, which may be through a director's loan or share premium instead.
Is called up share capital not paid an asset?
Yes. It is money shareholders owe the company for shares already called. It appears either as item A at the top of the balance sheet or within other debtors. In a small company it is usually a few pounds and often never collected, so do not treat it as available cash.
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