What does called up capital refer to in a company?

Called up capital refers to the portion of unpaid capital that a company has requested its shareholders to pay. This term is most commonly used in the context of shares that have not been fully paid up. When a company issues shares, it often does so in a way that allows it to call for payments on those shares at a future date.

In this scenario, "called up capital" indicates the amount that shareholders are obliged to pay as part of their shareholding in the company but which has not yet been paid. This is an essential concept in understanding company finances, as it directly affects both the cash flow of the company and the obligations of the shareholders.

Fundamentally, when a company needs to raise capital but does not require all of it to be paid immediately, it can allow shareholders to contribute a portion of the capital later, hence the concept of calling up that capital when needed. While other options might address different aspects of company finance—such as paid capital, rights issues, or retained earnings—they do not accurately capture the definition of called up capital as required in this context.