Which among the following statements is NOT true.

The correct answer is Option (2) : The director of a company must be a shareholder.

There is no legal requirement for a director to be a shareholder. The two roles are distinct. A company's Articles of Association may, however, impose such a qualification.

Share application account is a personal account. True. A share application account represents money received from applicants (persons), so it is treated as a personal account.

Paid up capital cannot exceed called up capital. True. Paid-up capital is the portion of called-up capital that shareholders have actually paid. It can never exceed called-up capital.

Capital reserves are created from capital profits. True. Examples: profit on sale of fixed assets, revaluation, premium on issue of shares, etc.

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