Question

_________ refers to that part of subscribed capital which has actually been paid by the shareholder to whom shares has been allotted.

• A. Paid-up capital
• B. Subscribed capital
• C. Issued capital
• D. Nominal or authorized capital

Answer 1

Answer: (A)

Paid-up capital

Paid-up capital is the amount of money a company has received from shareholders in exchange for shares of stock. Paid-up capital is created when a company sells its shares on the primary market, directly to investors. When shares are bought and sold among investors on the secondary market, no additional paid-up capital is created as proceeds in those transactions go to the selling shareholders, not the issuing company.