WAEC SSCE - Commerce - 1989 (Objective)

Question 1 Report

The amount of new capitals with which a new company proposes to be registered is called?

called-up capital

nominal capital

fixed capital

issued capital

circulating capital

Answer Details

The amount of new capital with which a new company proposes to be registered is called the nominal capital. This is the maximum amount of share capital that the company is authorized to issue to its shareholders. The nominal capital is also sometimes referred to as authorized capital or registered capital. It is the amount of capital that is stated in the company's memorandum of association, which is a legal document that sets out the company's purpose, activities, and structure. The nominal capital does not represent the actual amount of money that has been invested in the company, but rather the amount of share capital that the company is authorized to issue. The actual amount of share capital that has been issued to shareholders is called the issued capital. In summary, the nominal capital is the amount of new capital that a new company proposes to be registered with, which represents the maximum amount of share capital that the company is authorized to issue to its shareholders.






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