Match each category of share capital on the left with its correct definition on the right.
- Authorized CapitalThe maximum amount of share capital a company is legally permitted to raise as stated in its Memorandum of Association.
- Issued CapitalThe portion of authorized capital that has been offered to the public for subscription.
- Called-up CapitalThe total amount of issued capital that shareholders have been requested to pay for by the directors.
- Reserve CapitalThe portion of uncalled capital set aside by special resolution to be called up only in the event of winding up the company.
Answer
Authorized Capital matches the maximum legal share capital limit in the Memorandum of Association; Issued Capital matches the portion offered to the public; Called-up Capital matches the amount requested from shareholders to pay; Reserve Capital matches the portion of uncalled capital callable only during liquidation.
Each category accurately reflects its stage and function in share capital classification: Authorized capital defines the registered statutory ceiling, Issued capital represents the shares offered to investors, Called-up capital represents requested payments on issued shares, and Reserve capital is the uncalled capital reserved specifically for winding up.
Step-by-Step Solution
Key Concept
Classification of Share Capital