Answer based on following passage.
Earn Limited, with an authorised capital of ₹10,00,000 divided into equity shares of ₹ 10 each, issued 50,000 equity shares at a premium of ₹3 per share payable as follows.
On application - ₹3 per share
On allotment - ₹5 per share (including Premium)
On first and final call- Balance amount.
Applications were received for 60,000 shares. The Directors allotted the shares to all applicants on pro-rata basis. All money received except the first and final call on 1,000 shares issued to Ravi.
Identify the term that represents authorised capital which is not offered for public subscription.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Unissued Capital
Authorised capital is the maximum a company may raise. The part actually offered to the public is issued capital; the part not offered for public subscription is unissued capital, which may be offered later.
Option (1) Uncalled Capital — Incorrect. It is the part of subscribed capital not yet called up, so it has already been issued.
Option (2) Reserve Capital — Incorrect. It is uncalled capital kept to be called only on winding up; it too is already issued and subscribed.
Option (4) Calls not made — Incorrect. This is another way of saying uncalled amount on issued shares.
NCERT (2026-27 edition): |