Arrange the following in correct sequence :
(A) Paid up Capital
(B) Subscribed Capital
(C) Issued Capital
(D) Authorised Capital
Choose the correct answer from the options given below:
Arrange the following in correct sequence :
(A) Paid up Capital
(B) Subscribed Capital
(C) Issued Capital
(D) Authorised Capital
Choose the correct answer from the options given below:
Solution
The correct sequence follows the natural progression of share capital from maximum to actual realization:
Authorised Capital (D) is the maximum capital a company can raise as mentioned in its Memorandum of Association. This sets the upper limit.
↓
Issued Capital (C) is the portion of authorised capital that the company decides to offer to the public for subscription. This cannot exceed authorised capital.
↓
Subscribed Capital (B) is the portion of issued capital that investors actually agree to purchase. This cannot exceed issued capital.
↓
Paid-up Capital (A) is the amount actually received from shareholders against the subscribed capital. This represents the actual money received by the company.
The relationship can be expressed as:
Authorised Capital ≥ Issued Capital ≥ Subscribed Capital ≥ Paid-up Capital
Therefore, the correct sequence is (D), (C), (B), (A).
Correct Answer: Option 2
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