Practicing Success
When a company reserve a portion of its uncalled capital to be called in the event of winding up, such uncalled capital is known as : |
Reserve capital Capital Reserve Called up Capital Subscribed Capital |
Reserve capital |
The correct answer is Option (1) - Reserve capital. A company may set aside a portion of its uncalled capital, which would only be called upon in the event of the company's liquidation or winding up. This uncalled amount is referred to as the company's 'Reserve Capital' and is exclusively reserved for the satisfaction of creditors during the liquidation process. |