Question

State whether the following statement is true.

Paid-up capital can exceed called-up capital.

Answer 1

This statement is false.

Explanation:

Paid-up capital can never exceed called-up capital. Called-up capital represents the maximum amount of money a company has officially demanded from its shareholders. Shareholders cannot pay more toward share capital than requested. If any shareholder pays extra money in advance, that excess amount is legally classified as Calls-in-Advance and must be shown under Current Liabilities, meaning it is never added to the paid-up share capital total.