Multiple choice

In the context of capital of a bank,

(a) the authorized capital means the maximum limit of share capital which the bank is authorized to have under its memorandum (b) the amount of share capital which is subscribed and received is called paid up capital (c) the amount of share capital which is issued and paid up is called subscribed capital

  1. (a) to (c) all correct

  2. (a) and (b) only are correct

  3. (a) and (c) only are correct

  4. (b) and (c) only are correct

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

“Authorised capital” or “nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company. 

“Paid-up share capital” or “share capital paid-up” means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called.