Question

The maximum amount which a company is allowed to raise funds, by issue of shares, is known as _____________.

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

Answer 1

The correct option is C Nominal capital

Authorized / Nominal Share Capital:

The maximum amount of share capital a company is allowed to raise is called its authorized 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.