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what is a use of authorised capital?how it is deal in any questions
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The Authorized Capital is the maximum amount of capital that a company can raise through the issue of shares to the shareholders. In other words, the capital amount with which a company is registered with the registrar of the company (as stated in the article of incorporation) is called the authorized capital.
The authorized capital is not fully used by the management; a safety buffer is maintained that can be used to raise the additional capital whenever the need arises. Also with the issue of shares the ownership in the company gets diluted, and therefore, the full amount of capital is not raised with the intent to have limited control over the affairs of the company.
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what is a use of authorised capital?how it is deal in any questions Related: Example : Issue of Shares (part 1 ) - Class 12, Accountancy
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