CAF-4 · Chapter 20 · Question 4 of 15
JKL Limited sub-divides its shares from a par value of Rs. 100 to Rs. 10 each to increase marketability. What happens to the overall paid-up value of the share capital?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It remains exactly the same.
Explanation
Sub-division of shares into shares of a smaller par value is done without changing the total paid up value of the share capital. Every member possessing one share will now possess 10 shares, but the overall paid-up value remains the same.
More Share capital and commencement of business MCQs
- 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?
- Q9Which of the following is a mandatory requirement for a public company to obtain a certificate of commencement of business?
- Q10Maroon (Private) Limited wants to raise capital by issuing shares to the general public. What must the company do regarding its status…