Class 12 Exam > Class 12 Questions > portion of share capital that is reserved by ...
Start Learning for Free
portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________
- a)Reserve capital
- b)Capital reserve
- c)Issued capital
- d)Subscribed capital
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
portion of share capital that is reserved by the company and will be u...
Reserved Capital
Reserved capital is the portion of the share capital that is held by the company and is only utilized in the event of winding up of the company. It is also known as uncalled capital or dormant capital.
Features of Reserved Capital
- It is the part of the authorized share capital that is not called up by the company.
- It is utilized to meet the liabilities of the company in case of winding up.
- It is not available for the payment of dividends or distribution among shareholders.
- It is shown separately in the balance sheet of the company.
- It can be called up by the company only with the approval of the shareholders.
Importance of Reserved Capital
- Provides security to creditors: The reserved capital provides security to the creditors of the company as it is used to meet the liabilities of the company in case of winding up.
- Boosts investor confidence: The existence of reserved capital indicates the financial strength of the company, which boosts investor confidence.
- Facilitates expansion: The presence of reserved capital provides the company with the option of increasing its share capital without going through the cumbersome process of issuing new shares.
Conclusion
Reserved capital is an essential component of the share capital of a company. It provides security to the creditors and boosts investor confidence. The company can utilize this capital only in case of winding up, and it cannot be used for the payment of dividends or distribution among shareholders.
Reserved capital is the portion of the share capital that is held by the company and is only utilized in the event of winding up of the company. It is also known as uncalled capital or dormant capital.
Features of Reserved Capital
- It is the part of the authorized share capital that is not called up by the company.
- It is utilized to meet the liabilities of the company in case of winding up.
- It is not available for the payment of dividends or distribution among shareholders.
- It is shown separately in the balance sheet of the company.
- It can be called up by the company only with the approval of the shareholders.
Importance of Reserved Capital
- Provides security to creditors: The reserved capital provides security to the creditors of the company as it is used to meet the liabilities of the company in case of winding up.
- Boosts investor confidence: The existence of reserved capital indicates the financial strength of the company, which boosts investor confidence.
- Facilitates expansion: The presence of reserved capital provides the company with the option of increasing its share capital without going through the cumbersome process of issuing new shares.
Conclusion
Reserved capital is an essential component of the share capital of a company. It provides security to the creditors and boosts investor confidence. The company can utilize this capital only in case of winding up, and it cannot be used for the payment of dividends or distribution among shareholders.
|
Explore Courses for Class 12 exam
|
|
Similar Class 12 Doubts
portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer?
Question Description
portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer?.
portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer?.
Solutions for portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Class 12.
Download more important topics, notes, lectures and mock test series for Class 12 Exam by signing up for free.
Here you can find the meaning of portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice portion of share capital that is reserved by the company and will be utilised only on the happening of winding up of the company is called ________a)Reserve capitalb)Capital reservec)Issued capitald)Subscribed capitalCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Class 12 tests.
|
|
Explore Courses for Class 12 exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup