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Home Questions F79KXX69H5
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Shares

Question:

What is the nominal share capital?

Options:

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.

Correct Answer:

The maximum amount of share capital which a company is authorised to issue.

Explanation:

The correct answer is Option (2) → The maximum amount of share capital which a company is authorised to issue.

  • Nominal Share Capital (also called Authorised Capital) is the maximum amount of capital that a company is legally permitted to raise by issuing shares, as stated in its Memorandum of Association.

  • It represents the upper limit; the company cannot issue share capital beyond this amount without altering its Memorandum through legal procedures.

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