Question

Reserve capital is ______.

• A. that part of uncalled capital which has to be called up in the event of winding up of the company
• B. same as capital reserve
• C. created out of revenue profit
• D. created out of capital profits

Answer 1

Answer: (A)

that part of uncalled capital which has to be called up in the event of winding up of the company

Reserve Capital - A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company. Such uncalled amount is called 'Reserve Capital' of the company. It is available only for the creditors on winding up of the company.