Which of the following statements are true in case of a company?
(A) Memorandum of Association is also known as statement in Lieu of Prospectus.
(B) Paid up capital can exceed called up capital.
(C) Capital Reserves are created from capital profits.
(D) The part of capital which can be called up only on winding up of the company is called Reserve Capital.
(E) Minimum subscription must be at least 90% of the shares issued.
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (C), (D) and (E) only
(A) Memorandum of Association is also known as statement in Lieu of Prospectus. — False. The Memorandum is the company’s charter; a statement in lieu of prospectus is a separate document filed when no prospectus is issued.
(B) Paid up capital can exceed called up capital. — False. Paid-up capital is the part of called-up capital actually received, so it can never be more.
(C) Capital Reserves are created from capital profits. — True.
(D) The part of capital which can be called up only on winding up of the company is called Reserve Capital. — True.
(E) Minimum subscription must be at least 90% of the shares issued. — True. SEBI requires at least 90% of the issued amount.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
