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      Question

      Which of the following is not true about nominal capital? 

      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 “authorised capital” or “nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company.  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. 

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