Authorized capital vs paid-up capital is a comparison between different capital figures in company records. Reconcile the stated amounts, shares, and contribution evidence before treating them as the same number.
Authorized capital and paid-up capital describe different aspects of an Indonesian limited liability company’s share capital. Authorized capital is the overall share-capital amount established in the company’s corporate structure, while paid-up capital concerns the capital contributed for issued shares. Issued capital is the connecting concept: it identifies the shares actually issued or subscribed within that structure.
A business can therefore report authorized capital greater than its issued and paid-up capital without implying that the difference is money held in a bank account. For PT PMDN and PT PMA owners, understanding these figures helps prevent confusion when reviewing incorporation documents, shareholder contributions, financing arrangements, or later capital changes.
Authorized Capital vs Paid-Up Capital: The Main Difference
The simplest distinction is between capacity and contribution.
Authorized capital describes the share-capital amount established in the company’s articles of association. It provides the framework within which shares may be issued, subject to the applicable legal and corporate requirements.
Issued capital describes the portion represented by shares that have actually been issued or subscribed.
Paid-up capital describes the contribution made in connection with those issued shares. It should not be confused with the company’s current cash balance or the total value of its assets.
The official AHU Limited Liability Company FAQ identifies authorized capital, issued capital, and paid-up capital as separate concepts used in an Indonesian PT’s capital structure.
When comparing these amounts, ask three different questions: How much capital is authorized? How much has been issued? What contributions have actually been made and recorded?
How Indonesian PT Capital Is Described
Indonesia’s company-law framework recognizes capital divided into shares.
The original published text of Law Number 40 of 2007 describes a limited liability company as a corporate entity whose authorized capital is divided into shares.
That published text is an important legal reference, but the law has subsequently been amended. Its original wording alone should not be used as a complete statement of current capital thresholds or procedural requirements for every company.
The official publication listing for Government Regulation Number 8 of 2021 identifies authorized capital and the establishment, amendment, and dissolution of companies meeting micro and small enterprise criteria as subjects of the regulation.
The publication listing does not, by itself, establish every current operational condition or investment requirement. Before applying a capital threshold or filing rule to a particular company, the currently applicable provisions and relevant company category should be checked.
For the present comparison, the key point is that the three capital figures serve different reporting purposes.
Authorized Capital vs Paid Up Capital Indonesia: Comparison Table
This authorized capital vs paid up capital Indonesia comparison includes issued capital because it connects the amount authorized with the shares for which contributions are recorded.
| Comparison | Authorized capital | Issued capital | Paid-up capital |
|---|---|---|---|
| Main meaning | Total share-capital amount established in the corporate structure | Portion represented by issued or subscribed shares | Capital contributed toward issued shares |
| Main question | How much share capital is authorized? | How much has actually been issued? | What contribution has been made? |
| Typical reference | Articles of association | Corporate and shareholder records | Corporate and contribution records |
| Equivalent to cash in the bank? | No | No | No |
| Changes automatically when the company earns revenue? | No | No | No |
| Main review concern | Authorized amount and available unissued capacity | Number and allocation of shares | Evidence and recording of contributions |
The table illustrates why the figures should be read together. None of the three amounts, considered alone, proves the company’s profitability, current liquidity, or ability to pay its operating expenses.
Authorized Capital
Authorized capital is the starting framework for a company’s share capital.
Suppose a company has authorized capital of IDR 2 billion. That figure describes the authorized amount, not necessarily funds already contributed to the business.
To understand how much capital has actually been issued, the reader must examine the issued share figures separately.
An authorized amount should also not be confused with the value of a proposed commercial investment. Capital structure and a project’s total investment budget are different subjects.
Issued Capital
Issued capital is the portion of the authorized share capital represented by shares that have been issued or subscribed.
It matters because ownership percentages are generally evaluated against the shares in issue, rather than treating unissued authorized capacity as if it already belonged to investors.
For example, if two shareholders hold 60% and 40% of the issued shares, those percentages describe their respective portions of the issued share structure. They do not mean that 60% and 40% of the company’s authorized but unissued capital have already been paid into the business.
A new issuance can affect shareholder proportions. A transfer of existing shares, by contrast, can change who owns the shares without necessarily increasing the number of issued shares.
Paid-Up Capital
Paid-up capital concerns the capital contributions made toward issued shares.
The relevant evidence should be reconciled with the corporate documentation and the actual transaction. A stated paid-up amount should not be accepted solely because it appears in a business presentation.
Paid-up capital also does not necessarily remain as cash. A company may use contributed funds in legitimate business operations, acquire assets, or incur expenses. Whether particular spending has been properly recorded is a separate accounting question.
Consequently, a company’s paid-up capital amount should not be interpreted as a guarantee that the same amount is immediately available for withdrawal or expenditure.
A Practical Share Capital Calculation
Consider a hypothetical Indonesian PT with the following initial capital structure:
- Authorized capital: IDR 2,000,000,000
- Nominal value per share: IDR 1,000,000
- Total authorized shares: 2,000
- Issued shares: 500
- Nominal value of issued shares: IDR 500,000,000
- Recorded paid-up capital: IDR 500,000,000
In this example, 1,500 authorized shares have not been issued, representing IDR 1,500,000,000 in unissued authorized capacity.
That unissued capacity is not an outstanding cash balance, a receivable automatically owed to the company, or evidence that a shareholder has committed to purchase all remaining shares.
If Shareholder A owns 300 issued shares and Shareholder B owns 200, their holdings represent 60% and 40% respectively of the 500 issued shares.
Now suppose the company proposes to issue 200 additional shares. The company would need to assess the proposed corporate action and the applicable requirements before treating those shares as validly issued and contributed.
If the proposed issuance were properly completed, the number of issued shares would become 700. But the ownership percentages would depend on who subscribed for the additional shares.
This illustration is mathematical and hypothetical. It does not establish the minimum legally permitted capital, contribution timing, or procedural requirements for a particular PT PMA, PT PMDN, or regulated business.
Where to Check the Figures in Company Documents
Capital terminology becomes especially important when different records show different numbers.
Start with the company’s latest available articles of association and relevant notarial deeds. Identify the stated authorized capital and the current issued and paid-up figures.
Next, examine the shareholder information. Determine how many shares have been issued and how those shares are allocated among the shareholders.
Compare the corporate records with relevant AHU outputs. If amendments have occurred, establish which documents reflect the latest completed corporate action rather than relying on an earlier deed alone.
Then review the supporting contribution evidence and accounting treatment. The amount recorded as paid-up capital should be reconciled with the company’s documentation and the relevant financial records.
Finally, identify whether another corporate system or investment record shows a different figure because it measures something else. For example, a business investment estimate and an authorized-capital amount should not be assumed to describe the same financial concept.
The objective is to reconcile like-for-like figures before treating a difference as an error.
Capital Contributions, Shareholder Loans and Investment Spending
Not every transfer of money from an investor to a company increases its share capital.
A shareholder might provide funds through a loan rather than subscribe for additional shares. The legal agreement, corporate decisions, and accounting records should establish which arrangement is intended.
Similarly, a company might plan to spend money on premises, equipment, employees, or other business activities. Those investment expenditures should not automatically be recorded as increases to authorized capital.
A transfer of existing shares is another distinct transaction. The buyer may pay the selling shareholder, but that payment should not automatically be treated as fresh paid-up capital received by the company.
Before changing any corporate capital figure, identify the actual transaction: contribution for shares, purchase of existing shares, shareholder financing, or ordinary business expenditure.
This classification reduces the risk of inconsistent capital amounts, incorrect ownership assumptions, and confusion between corporate records and financial statements.
When Does the Difference Matter for PT PMDN and PT PMA?
The distinction matters during incorporation, changes to shareholding, new capital contributions, and review of company records.
For a new company, investors need to understand what amount the proposed capital structure authorizes and which shares are to be issued and contributed.
For an existing company, the distinction becomes important when raising additional equity, adjusting share ownership, or preparing a formal capital amendment.
The AHU company amendment FAQ distinguishes changes to authorized capital from increases in issued and paid-up capital when describing its approval and notification categories.
That classification provides a useful starting point, but the correct administrative route must be checked against current applicable requirements and the actual corporate documents.
For a PT PMA, corporate share capital should also be distinguished from investment planning and any separate requirements relevant to the business activity. It would be misleading to infer an applicable foreign-investment threshold from the authorized-capital figure alone.
For a PT PMDN, the same basic terminology remains useful when investors are comparing shareholder contributions, financing, and the company’s registered capital structure.
The practical approach is to understand the capital figures first, then decide whether a corporate amendment or another type of documentation review is actually needed.
For a foreign-investment company, read the separate guides to PT PMA paid-up capital and PT PMA investment value alongside the capital figures in the corporate records. Keep each figure and its supporting evidence clearly identified during the review.
Conclusion
Authorized capital, issued capital, and paid-up capital describe related but different elements of an Indonesian PT’s corporate structure.
Authorized capital establishes the share-capital framework. Issued capital identifies the shares actually issued or subscribed. Paid-up capital concerns the contributions made toward those shares.
No single figure is a reliable substitute for checking the company’s ownership records, financial position, or the legal documentation supporting a particular contribution.
For business owners and investors, the most useful next step depends on the question being asked: review the articles of association for the authorized amount, the share records for issued ownership, and the contribution records for paid-up capital. When those records do not reconcile, investigate the underlying transaction before assuming a formal amendment is necessary.
Review Your Indonesian Company’s Capital Structure
If you are establishing or reviewing a PT PMDN or PT PMA and need to clarify authorized, issued, or paid-up capital, contact Bali Legal ID to discuss the proposed company structure and supporting documentation.
A company setup and corporate documentation consultation can help identify which capital figures should be reviewed, how they relate to shareholder records, and which questions need clarification before a corporate change is prepared.
Read More: Business Setup Bali for PT PMA, PT PMDN & OSS RBA Registration
Discuss the scope and supporting records with Bali Legal ID through our business setup services before deciding the next step for your Bali business or transaction.
FAQ authorized capital vs paid-up capital
Is authorized capital the same as paid-up capital in Indonesia?
No. Authorized capital establishes the company’s authorized share-capital amount, while paid-up capital concerns contributions made for issued shares. The two amounts may differ, depending on the company’s actual structure and applicable requirements.
What is the difference between issued capital and paid-up capital?
Issued capital concerns shares that have been issued or subscribed. Paid-up capital concerns contributions made toward those shares. The relevant figures and evidence should be checked against the company’s corporate documentation and applicable rules.
Does authorized capital mean the company has that amount of cash?
No. Authorized capital is a corporate capital figure, not a statement of current bank deposits or liquid funds.
Does paid-up capital equal the company’s current bank balance?
No. Paid-up capital records capital contributed toward shares. The company’s cash balance can change as it conducts business, pays expenses, or acquires assets.
Does buying existing shares increase paid-up capital?
Not automatically. A transfer of existing shares may change the shareholders without increasing the number of issued shares or generating a new contribution to the company. The actual transaction documents should be reviewed.
Should an investor compare all three capital figures before a company amendment?
Yes. Comparing authorized, issued, and paid-up capital helps identify which part of the corporate structure is expected to change. The appropriate legal and administrative treatment can then be assessed using the actual corporate records.
References & Sources
- Directorate General of General Legal Administration: Limited Liability Company FAQ — portal.ahu.go.id
- Original Published Text of Law Number 40 of 2007 on Limited Liability Companies — jdih.kemenkeu.go.id
- Government Regulation Number 8 of 2021 on Company Capital and Administration of Micro and Small Enterprise Companies — peraturan.bpk.go.id