Question

Nominal share capital is ?

• A. That part of the authorised capital which is actually issued to the public by the company.
• B. The amount of capital which is actually applied for by the prospective shareholders.
• C. The maximum amount of share capital which a company is authorised to issue.
• D. The amount actually paid by the shareholders.

Hint:

Nominal capital is another name for authorised capital, the maximum limit written in the Memorandum.

Answer 1

The Correct Option is C

Step 1: Understand the term
Nominal share capital is also called authorised or registered capital. It is the capital stated in the Memorandum of Association of the company.

Step 2: Key point
It is the upper limit. The company cannot issue shares worth more than this amount unless it first alters its Memorandum by the proper legal procedure.

Step 3: Check option 1
This describes issued capital, the part of authorised capital that is offered to the public. So option 1 is wrong.

Step 4: Check option 2
This describes subscribed capital, the amount for which people have applied. So option 2 is wrong.

Step 5: Check option 3
This says it is the maximum amount the company is authorised to issue. This matches the definition, so option 3 is correct.

Step 6: Check option 4
This describes paid up capital, the amount actually paid by shareholders. So option 4 is wrong.

Final Answer:
Nominal capital is the maximum share capital a company can issue. This is option 3. \[ \boxed{\text{Option 3}} \]