The part of an entity’s capital that would be raised from the sale of its shares for which it has not received payment, as for which it could demand payment. Callable capital is a standby form of equity financing that a entity can utilize in the case of pressing need. For example, an entity may have its capital (i.e., authorized capital) in the form of paid-in capital (PIC) and callable capital. Capital composition may be: 20% paid-in capital and 80% callable capital.

Callable capital is a special type of guarantee committed by an entity’s shareholders as a last resort for enhancing its financial position in terms of the ability to repay debt obligations to bond holders (creditors) in the event of an extreme financial distress.

The portion actually called is known as called-up capital (called-up share capital).