Define authorized capital.

Authorized capital refers to the maximum capital a company is legally permitted to raise by issuing shares, as specified in its Memorandum of Association (MoA). It represents the upper limit of share capital that the company can subscribe to and is registered with the government. This capital is divided into a fixed number of shares with a specified face value. For instance, if a company’s MoA allows the issuance of 50,000 shares of ₹10 each, its authorized capital is ₹500,000. It is also known as nominal capital or registered capital and does not necessarily mean the company has issued or received any funds from shareholders. The company can issue shares up to this authorized limit, but it is not obligated to do so.