CAF-4 · Chapter 20 · Question 2 of 15
What is the difference between 'Authorised share capital' and 'Paid up share capital'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Authorised capital is the maximum amount a company can issue, while paid up capital is the amount actually issued and subscribed.
Explanation
Authorised share capital is the maximum amount of share capital which a company is authorised to issue, whereas paid up share capital is the amount issued by the company and subscribed by the shareholders.
More Share capital and commencement of business MCQs
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- Q6What is another legally recognized term used for 'Ordinary shares'?
- Q7Normally, what voting rights do standard ordinary shareholders hold at the general meetings of a company?
- Q8What is the underlying rationale for a company to issue different classes of shares with varying voting rights?