Question

Which of the following statements is correct?

Options

• Authorised Capital is always higher than the Issued Capital.

• Issued Capital is always equal to Authorised Capital.

• Authorised Capital can be higher or equal but cannot be less than Issued Capital.

• Issued Capital is independent of Authorised Capital.

Answer 1

Authorised Capital can be higher or equal but cannot be less than Issued Capital.

Explanation:

Issued Capital is the part of Authorised Capital that is offered to the public for subscription. Therefore, Issued Capital can never exceed Authorised Capital; it may be equal to or less than it.