What capital can be called up in the event and purpose of the company being wound up?

Which capital can only be called in the event of winding up?

The portion of uncalled capital to be called only in the event of winding up of the company is called Reserve Capital.

Under what circumstances a company can be wound up?

Circumstances in which a Company May Be Wound Up

  • A special resolution is passed by the company that the company shall be wound up by the tribunal.
  • Failure of the company in reporting a statutory report at the registrar’s office.
  • Non-commencement of the company in business within one year of incorporation.

When can a company be wound up?

If the Company has made a default in filing with the Registrar its financial statements or annual returns for immediately preceding five consecutive financial fiscal years; or. If the Tribunal is of the opinion that it is just and equitable that the Company should be wound up.

When can reserve capital be called?

A portion of profit set aside that can be used for specific purposes only is known as Capital Reserve. Reserve Capital is that form of uncalled share capital that can be called up by the company only in the event of the liquidation of the company.

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What do you mean by called up capital?

The amount of share capital shareholders owe, but have not paid, is referred to as called-up capital. Any amount of money that has already been paid by investors in exchange for shares of stock is paid-up capital.

Is nominal capital and Authorised capital same?

The authorized capital of a company (referred as authorized share capital or nominal capital) is the maximum amount of share capital that the company is authorized by its constitutional documents to issue and allocate to shareholders. Part of the authorized capital can remain unissued.

Who can apply to wind up a company?

Under s. 124(1) IRDA, the creditor, amongst others, are entitled to present a winding-up petition. By far the vast majority of winding up applications are made by creditors seeking to enforce the payment of undisputed debts.

What are the circumstances in which a company may be compulsorily winding up on the orders of tribunal?

In case the company does not pay the debts, the debt of the creditor exceeding Rs 1 lakhs is due and unpaid by the company within 21 days from the due date, or any execution decree is passed in favour of the creditor or tribunal has a reason that company will not pay off any debts then company would be liable for …

What is wound up in business?

Winding up is the process of dissolving a company. While winding up, a company ceases to do business as usual. Its sole purpose is to sell off stock, pay off creditors, and distribute any remaining assets to partners or shareholders.

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What are the different types of winding up of a company?

If the report shows that the affairs of the company were not conducted in a manner prejudicial to the interest of its members or to the public interest, then from the date of the submission of the report to the Tribunal, the company shall be deemed to be dissolved.

What is issued capital of a company?

Issued share capital is simply the monetary value of the shares of stock a company actually offers for sale to investors. The number of issued shares generally corresponds to the amount of subscribed share capital, though neither amount can exceed the authorized amount.

What is called reserve capital?

Capital Reserve means the part of profit reserved by the company for a particular purpose such as to finance long-term projects or to write off capital expenses. Reserve Capital shows the part of the authorized capital that has not yet called up by the company and is available for drawing, if necessary.

What are the examples of capital reserve?

Few examples of capital reserves are:

  • Cash received by selling current assets.
  • Premium earned on the issue of share and debentures.
  • Excess on revaluation of assets and liabilities.