Question

Answer in one sentence only.

What do you mean by reserve capital?

What is Reserve Capital?

Answer 1

Reserve capital represents the portion of subscribed capital that remains uncalled except in case of winding up or at the time of liquidation. As per Section 99 of the Companies Act, 1956, a company can create reserve capital by passing a special resolution.

Answer 2

Reserve Capital is that part of the subscribed capital which is reserved to be called-up only at the time of winding up or liquidation of the company.