Company Accounts

Share Capital

Easy

Nominal share capital is-

that part of authorised share capital which is issued by the company.

that amount of capital which is actually applied for by the prospective shareholders.

the maximum amount of share capital which a company is authorized to issue.

the amount actually paid by the shareholders.

✅ Correct Option: 3

Nominal Share Capital is also known as Authorised Capital or Registered Capital.

It represents the maximum amount of share capital that a company is authorized to issue to shareholders as mentioned in the Memorandum of Association at the time of incorporation.

Understanding Different Types of Share Capital:

Nominal/Authorised Capital

Maximum limit of capital a company can raise
Stated in the Capital Clause of Memorandum of Association
Example: If Nominal Capital = ₹10,00,000, the company cannot issue shares beyond this amount without altering the MOA

Issued Capital

Portion of authorised capital actually offered to the public
Always ≤ Authorised Capital
Example: Out of ₹10,00,000 authorised, company may issue only ₹7,00,000

Subscribed Capital

Portion of issued capital for which applications are received
Generally ≤ Issued Capital
Example: Out of ₹7,00,000 issued, public may apply for ₹6,00,000

Paid-up Capital

Amount actually paid by shareholders
Can be less than subscribed capital if calls are pending
Example: If ₹2 per share is called on ₹10 shares, paid-up = Subscribed shares × ₹2

The correct answer is Option 3 because nominal capital sets the upper ceiling for share issuance as per the company's constitutional documents.

2025: 13 May Shift 1

Arrange steps for the issue of shares-

(A) Allotment of shares

(B) Issue of Prospectus

(D) Receipt of Applications

Choose the correct answer from the options given below:

2026: 11 May Shift 1

150 shares of Mr. Ram of Rs.10 each issued at a premium of Rs.4 per share payable with allotment were forfeited for non-payment of allotment money of Rs.8 per share including premium. The first and final call of Rs.4 per share was not made. The forfeited shares were reissued at Rs.15 per share fully paid-up. Calculate the amount transferred to capital reserve.

2026: 6 June Shift 1

Match List-I with List-II

List-I	List-II
(A) Subscribed but not fully paid up capital	(I) Shown under "Other Current Liabilities" in Balance Sheet
(B) Calls in Arrears	(II) Shown under "Reserves & Surplus" in Balance Sheet
(C) Calls in Advance	(III) Deducted from Subscribed Capital
(D) Securities Premium	(IV) Share Capital Note Disclosure

Choose the correct answer from the options given below:

2026: 13 May Shift 1

Select the correct statements related to shares and share capital :

(A) Authorized Share Capital and Nominal Share Capital are different from each other.

(B) Equity shares cannot be redeemed during the lifetime of the company.

(D) Equity shares cannot be issued to the public at a discount.

Choose the correct statements from the options given below:

2022: 20 July Shift 1

PQR Ltd. issued 40,000 Equity shares of Rs. 10 each at par payable Rs. 3 on application, Rs. 4 on allotment and balance on first and final call. Applications were received for 1,10,000 shares. Applications for 20,000 shares were refused and allotment was made prorata to remaining applicants. Amount received on allotment is :

2026: 19 May Shift 1

Anu Ltd. invited applications for 30,000 Shares of Rs. 100 each at a premium of Rs. 20 per share payable as follows: On Application Rs. 40 (including Rs.10 premium), On Allotment Rs. 30 (including Rs.10 premium), On First Call Rs. 30 On Second and Final Call Rs. 20

Applications were received for 40,000 shares and pro-rata allotment was made on the application for 35,000 share. Excess application money was utilised towards allotment. Raju to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited immediately after allotment.

Find the amount of allotment not paid by Raju?

Nominal share capital is-

Solution

Understanding Different Types of Share Capital:

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