Question

Which of the following is correct statement with respect to Reserve Capital?

Options

• It can be called-up if a contingency arises.

• It can be called-up at any time by passing an ordinary resolution.

• It can be called-up in the event and for the purpose of the company being wound-up.

• It can be called-up as and when decided.

Answer 1

It can be called-up in the event and for the purpose of the company being wound-up.

Explanation:

Reserve capital is that portion of uncalled share capital which can be called only when the company is being wound up. It cannot normally be called during the company's lifetime.