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Question
Which of the following statements is true?
Options
The shares of a public limited company are not freely transferable
Paid-up capital is that part of the subscribed capital which has been called up.
The company cannot raise more capital than the amount of capital as specified in the Memorandum of Association.
The part of the uncalled capital which is called only in the event of winding up of the company is called Capital Reserve.
Solution
The company cannot raise more capital than the amount of capital as specified in the Memorandum of Association.
Explanation:
The paid-up capital is the share of the subscribed capital that the shareholders have paid up. Shares of a public limited company are freely transferable. Reserve Capital refers to the share of the uncalled capital that is only called when the company shuts up.
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