There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: The liability of a shareholder is limited up to the nominal value of the shares subscribed by one.
Reasoning: Paid up capital is the part of called up capital that actually has been paid by the subscriber to the company.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

Limited by shares means that the liability of the shareholders to the creditors of the company is limited to the capital originally invested, i.e. the nominal and unpaid value of the shares . In case of loss, shareholders are not liable to pay more than the nominal value of shares. Hence, its said that the liability of the shareholders is limited to the unpaid calls or nominal value of the shares.

In the case of the companies limited by guarantee, the liability of its members is limited to the extent of the guarantee given by them in the event of the company being wound up.

Paid up capital is the part of called up capital that actually has been paid by the subscriber.