Which of the following statements are correct?
(A) A company is an artificial person.
(B) Company's shares are generally transferable.
(C) Paid up capital can exceed called up capital.
(D) The part of capital which is called up only on winding up is called reserve capital.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A), (B) and (D) only
(A) A company is an artificial person. Correct. It is created by law and has a legal entity separate from its members.
(B) Company’s shares are generally transferable. Correct. The shares of a public company are freely transferable without the consent of the company or other members.
(C) Paid up capital can exceed called up capital. Incorrect. Paid up capital is the part of the called up capital actually received, so it is equal to or less than called up capital; money paid before it is called is shown separately as calls in advance.
(D) The part of capital which is called up only on winding up is called reserve capital. Correct. A company may keep part of its uncalled capital to be called only on winding up; this is reserve capital, available to the creditors.
NCERT (2026-27 edition):
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