Consider the following facts about the categories of Share Capital. A…

Consider the following facts about the categories of Share Capital.

A. Nominal Capital is that part of Authorised Capital which is actually issued to the public
B. Issued Capital is a part of Registered Capital
C. Subscribed Capital can be further categorised into fully paid-up and not fully paid up
D. Reserve Capital is a profit of capital nature
E. Called up Capital is that part of subscribed Capital which company has asked the shareholders to pay

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → B, C and E only

Share capital is classified as authorised, issued, subscribed, called up and paid up; each is a part of the one before it.

A. Nominal Capital is that part of Authorised Capital which is actually issued to the public — False. Nominal capital is another name for authorised capital; the part actually issued is the issued capital.

B. Issued Capital is a part of Registered Capital — True. Registered capital is authorised capital, and issued capital is the part of it offered to the public.

C. Subscribed Capital can be further categorised into fully paid-up and not fully paid up — True. It is shown as subscribed and fully paid up, and subscribed but not fully paid up.

D. Reserve Capital is a profit of capital nature — False. Reserve capital is the part of uncalled capital to be called only on winding up; a profit of capital nature goes to capital reserve.

E. Called up Capital is that part of subscribed Capital which company has asked the shareholders to pay — True. This is the book’s own description.

NCERT (2026-27 edition):
Authorised Capital – “… Authorised capital is the amount of share capital which a company is authorised to issue by its Memorandum of Association. The company cannot raise more than the amount of capital as specified in the Memorandum of Association. It is also called Nominal or Registered capital.”

NCERT (2026-27 edition):
Issued Capital – “… It is that part of the authorised capital which is actually issued to the public for subscription including the shares allotted to vendors and the signatories to the company’s memorandum.”

NCERT (2026-27 edition):
Categories of Share Capital

Extract from the NCERT textbook

NCERT (2026-27 edition):
Called up Capital – “… It is that part of the subscribed capital which has been called up on the shares, i.e., what the company has asked the shareholders to pay.”

NCERT (2026-27 edition):
Reserve Capital – “… A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company. Such uncalled amount is called ‘Reserve Capital’ of the company.”