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The amount of share capital which a company is authorised to issue by its Memorandum of Association is known as ______. - Accountancy

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Question

The amount of share capital which a company is authorised to issue by its Memorandum of Association is known as ______.

Options

  • Nominal capital 

  • Issued capital

  • Reserve capital

  • Subscribed capital

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Solution

The amount of share capital which a company is authorised to issue by its Memorandum of Association is known as nominal capital.

Explanation:

Nominal capital refers to the maximum amount of capital that a company is authorised to issue as stated in its Memorandum of Association. It is also called authorised capital.

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