Question : The maximum amount beyond which a company is not allowed to raise funds, by issue of shares is known as ___________.
Option 1: Issued Capital
Option 2: Reserve capital
Option 3: Nominal capital
Option 4: Subscribed capital
Correct Answer: Nominal capital
Solution : The amount of share capital that a firm is authorised to raise money through the public market is known as authorised capital, registered capital, or nominal capital. Basically, the capital that is listed in the company's memorandum of association beyond the authorised capital, registered capital, or nominal capital is thus registered, and the firm is not permitted to raise more funds.
However, the Authorised capital can further be increased by the Company.
Hence the correct answer is option 3.
