Which company has a minimum paid up capital of one lakh rupees or higher?
A
Government Company
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B
Private Company
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C
Producer Company
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D
Subsidiary Company
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Solution
The correct option is C Private Company The Companies Act, 2013 earlier mandated that all Private Limited Companies have a minimum paid up capital of Rs.1 lakh. This meant that Rs.1 lakh worth of money had to be invested in the company by purchase of the company shares by the shareholders to start business.
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.