Question

The maximum amount beyond which a company is not allowed to raise funds by issue of its shares. is called ______________.

• A. Subscribed capital
• B. Called-up capital
• C. Paid-up capital
• D. Authorised capital

Answer 1

Answer: (D)

Authorised capital

The maximum amount of share capital a company is allowed to raise is called its authorised capital. Though this does not limit the number of shares a company may issue, it does put a ceiling on the total amount of money that can be raised by the sale of those shares.