CUET Preparation Today
What is the nominal share capital? |
The amount actually paid by the shareholders The maximum amount of share capital which a company is authorised to issue. The amount of capital which is actually applied for by the prospective shareholders. That part of the authorized capital which is issued by the company. |
The maximum amount of share capital which a company is authorised to issue. |
The correct answer is Option (2) → The maximum amount of share capital which a company is authorised to issue. The nominal share capital is the maximum amount of share capital which a company is authorised to issue. Authorised capital is the amount of share capital which a company is authorised to issue by its Memorandum of Association. The company cannot raise more than the amount of capital as specified in the Memorandum of Association. It is also called Nominal or Registered capital. The authorised capital can be increased or decreased as per the procedure laid down in the Companies Act. It should be noted that the company need not issue the entire authorised capital for public subscription at a time. Depending upon its requirement, it may issue share capital but in any case, it should not be more than the amount of authorised capital. |
