The total amount that a company is allowed to raised according to its memorandum of association is known as
Answer Details
The total amount that a company is allowed to raise according to its memorandum of association is known as authorized capital. The memorandum of association is a legal document that sets out the company's constitution and rules, including the amount of authorized capital that the company is permitted to raise.
Authorized capital is also known as "nominal capital" or "registered capital". This represents the maximum amount of money that a company can legally raise by issuing shares to its shareholders. The company is not required to issue all of its authorized capital, but it cannot issue more shares than the authorized capital amount without first amending its memorandum of association.
The authorized capital is different from issued capital, which is the amount of capital that has actually been issued to shareholders, and paid-up capital, which is the portion of issued capital that has been paid for by shareholders. Called-up capital is the amount of capital that the company has requested from shareholders to pay for their shares.
In summary, authorized capital is the maximum amount of capital that a company is legally allowed to raise according to its memorandum of association.