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    Question

    Which of the following is not true about nominal

    capital?Ā 
    A It is registered amount that can be raised by issuing shares. Correct Answer Incorrect Answer
    B it is the capital that the memorandum of the company authorises as share capital Correct Answer Incorrect Answer
    C It is the contingency capital of the company Correct Answer Incorrect Answer
    D S.2(8) of the Companies Act defines it Correct Answer Incorrect Answer
    E All are true Correct Answer Incorrect Answer

    Solution

    Section 2(8) of the Companies Act 2013, defines ā€œauthorised capitalā€ or ā€œnominal capitalā€ means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company.Ā  Nominal capital has all the above mentioned features in options, except that it is not a contingency capital. It is the basic capital of the company on which the company also pays stamp duty.Ā 

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