Part of the subscribed capital which has been called up on the shares, i.e., what the company has asked the shareholders to pay is known as ……….
Part of the subscribed capital which has been called up on the shares, i.e., what the company has asked the shareholders to pay is known as ……….
Solution
When a company issues shares, it may not demand the entire share value immediately. The amount that the company formally requests shareholders to pay is Called up Capital.
Understanding the sequence:
Subscribed Capital is the total amount shareholders have agreed to pay for their shares.
Out of this subscribed capital, the company may call for payment in installments. For example, if shares of ₹10 each are issued, the company might first call ₹3 on application, then ₹4 on allotment, and ₹3 on first call.
Called up Capital = The portion that has been demanded so far (₹3 + ₹4 + ₹3 = ₹10 in this case)
Uncalled Capital = The portion not yet demanded (₹0 in this case, but could be ₹3 if only the first two installments were called)
The question specifically states "what the company has asked the shareholders to pay" - this is the defining characteristic of Called up Capital.
Paid up Capital would be what shareholders have actually paid, which may be less than called up capital if some shareholders haven't paid their dues.
Correct Answer: Option 1 - Called up Capital
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