CAF-4 · Chapter 20 · Question 14 of 15
What is the legal definition of 'Nominal share capital'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The maximum amount of share capital as authorized by the memorandum of association.
Explanation
Nominal share capital (or authorized share capital) is the maximum amount of share capital that a company is authorized to issue as per its memorandum of association.
More Share capital and commencement of business MCQs
- Q1How is a 'share' legally characterized under the Companies Act?
- Q2What is the difference between 'Authorised share capital' and 'Paid up share capital'?
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- Q4JKL Limited sub-divides its shares from a par value of Rs. 100 to Rs. 10 each to increase marketability. What happens to the overall…
- Q5In a company limited by shares, the share capital represents capital introduced into the company by the: