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Home Questions BU3DQXS5JZ
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Shares

Question:

Which of the following is called Registered capital of a company?

Options:

Subscribed capital

Issued Capital

Nominal Capital

Reserve capital

Correct Answer:

Nominal Capital

Explanation:

The correct answer is Option (3) → Nominal Capital

Nominal Capital, also known as Authorised Capital or Registered Capital, is the maximum amount of share capital that a company is legally permitted to issue to its shareholders. This limit is fixed and specified in the Memorandum of Association of the company at the time of its registration (hence the term "Registered Capital"). A company cannot issue shares beyond the limit set by its Nominal Capital without following legal procedures to amend its Memorandum of Association

Other Options :

  • Issued Capital: Portion of authorised capital actually issued to the public.

  • Subscribed Capital: Portion of issued capital that investors have agreed to buy.

  • Reserve Capital: Part of subscribed capital that will be called up only at the time of winding up.

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