Question

Under the Companies Act, 2013, ‘called-up capital’ means such part of the capital: -

• A. Which is already expended.
• B. Which has been called for payment.
• C. Which is available for distribution to members on liquidation of the company.
• D. Which is available for settlement of dues to government on liquidation of the company.

Hint:

Called-up capital is the bridge between subscribed capital and paid-up capital.
A company may not call up the entire nominal value of shares at once, but rather in installments (application, allotment, first call, etc.).

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question asks for the definition of the term "called-up capital" under the provisions of the Companies Act, 2013.

Step 2: Detailed Explanation:

• Section 2(15) of the Companies Act, 2013: This section explicitly defines "called-up capital".
According to the statutory definition, "called-up capital" means such part of the capital, which has been called for payment.

• Understanding Share Capital Terms:
1. Authorized/Nominal Capital: The maximum share capital that a company is authorized to issue.
2. Subscribed Capital: That part of the capital which is for the time being subscribed by members.
3. Called-up Capital: The portion of the subscribed capital that the company has requested the shareholders to pay.
4. Paid-up Capital: The actual amount of money received by the company from shareholders against the called-up capital.

Step 3: Final Answer:
"Called-up capital" means the capital which has been called for payment, representing Option B.