Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:
Where will the classes of shares in which the company’s capital is to be divided, along with their respective rights and obligations be prescribed?
Options:
Memorandum of Association of Company
Article of Association of Company
Register of Company
None of these
Correct Answer:
Article of Association of Company
Explanation:
The amount of authorised capital, together with the number of shares in which it is divided, is stated in the Memorandum of Association but the classes of shares in which the company’s capital is to be divided, along with their respective rights and obligations, are prescribed by the Articles of Association of the company.