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________ capital means the sum mentioned in the capital clause of Memorandum of Association
- a)Full capital
- b)Maximum capital
- c)share capital
- d)Nominal Capital
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
________ capital means the sum mentioned in the capital clause of Memo...
Explanation:
The correct answer is Nominal Capital.
Here is a detailed explanation of each option:
A: Full capital
- Full capital refers to the total amount of money invested in a business or project.
- However, in the context of the question, it does not specifically refer to the sum mentioned in the capital clause of the Memorandum of Association.
B: Maximum capital
- Maximum capital refers to the upper limit of the capital that a company can raise or the maximum amount that can be invested in a business.
- It is not directly related to the sum mentioned in the capital clause of the Memorandum of Association.
C: Share capital
- Share capital refers to the total value of shares issued by a company.
- While it is an important concept in company law, it does not specifically refer to the sum mentioned in the capital clause of the Memorandum of Association.
D: Nominal capital
- Nominal capital refers to the sum mentioned in the capital clause of the Memorandum of Association.
- It represents the authorized capital or the maximum amount that a company is allowed to raise through the issuance of shares.
Therefore, the correct answer is Nominal Capital as it specifically refers to the sum mentioned in the capital clause of the Memorandum of Association.
View all questions of this test
The correct answer is Nominal Capital.
Here is a detailed explanation of each option:
A: Full capital
- Full capital refers to the total amount of money invested in a business or project.
- However, in the context of the question, it does not specifically refer to the sum mentioned in the capital clause of the Memorandum of Association.
B: Maximum capital
- Maximum capital refers to the upper limit of the capital that a company can raise or the maximum amount that can be invested in a business.
- It is not directly related to the sum mentioned in the capital clause of the Memorandum of Association.
C: Share capital
- Share capital refers to the total value of shares issued by a company.
- While it is an important concept in company law, it does not specifically refer to the sum mentioned in the capital clause of the Memorandum of Association.
D: Nominal capital
- Nominal capital refers to the sum mentioned in the capital clause of the Memorandum of Association.
- It represents the authorized capital or the maximum amount that a company is allowed to raise through the issuance of shares.
Therefore, the correct answer is Nominal Capital as it specifically refers to the sum mentioned in the capital clause of the Memorandum of Association.
Most Upvoted Answer
________ capital means the sum mentioned in the capital clause of Memo...
Explanation:
Definition of Nominal Capital:
Nominal capital refers to the total amount of capital mentioned in the capital clause of the Memorandum of Association of a company. It represents the maximum amount that a company can raise through the issuance of shares.
Significance of Nominal Capital:
- The nominal capital is important as it sets the limit for the amount of capital that a company can raise.
- It serves as a reference point for the company's authorized capital.
- The nominal capital determines the maximum value of shares that can be issued by the company.
Difference between Nominal Capital and Share Capital:
- Nominal capital is the maximum amount mentioned in the Memorandum of Association, while share capital is the actual amount contributed by shareholders.
- Share capital can be less than or equal to the nominal capital, but it cannot exceed the nominal capital.
Importance of Nominal Capital:
- It provides clarity on the maximum capital that a company can raise.
- It helps in determining the authorized capital of the company.
- It sets the boundaries for the issuance of shares by the company.
In conclusion, the nominal capital is the sum mentioned in the capital clause of the Memorandum of Association, representing the maximum amount of capital that a company can raise. It plays a crucial role in defining the authorized capital and setting limits for share issuance.
Definition of Nominal Capital:
Nominal capital refers to the total amount of capital mentioned in the capital clause of the Memorandum of Association of a company. It represents the maximum amount that a company can raise through the issuance of shares.
Significance of Nominal Capital:
- The nominal capital is important as it sets the limit for the amount of capital that a company can raise.
- It serves as a reference point for the company's authorized capital.
- The nominal capital determines the maximum value of shares that can be issued by the company.
Difference between Nominal Capital and Share Capital:
- Nominal capital is the maximum amount mentioned in the Memorandum of Association, while share capital is the actual amount contributed by shareholders.
- Share capital can be less than or equal to the nominal capital, but it cannot exceed the nominal capital.
Importance of Nominal Capital:
- It provides clarity on the maximum capital that a company can raise.
- It helps in determining the authorized capital of the company.
- It sets the boundaries for the issuance of shares by the company.
In conclusion, the nominal capital is the sum mentioned in the capital clause of the Memorandum of Association, representing the maximum amount of capital that a company can raise. It plays a crucial role in defining the authorized capital and setting limits for share issuance.
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________ capital means the sum mentioned in the capital clause of Memorandum of Associationa)Full capitalb)Maximum capitalc)share capitald)Nominal CapitalCorrect answer is option 'D'. Can you explain this answer?
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