Question

Arrange the following in the correct order:
(A) Subscribed Capital
(B) Issued Capital
(C) Authorised Capital
(D) Paid-up Capital
(E) Called-up Capital

• A. C, B, A, D, E
• B. B, C, A, D, E
• C. C, B, A, E, D
• D. B, C, A, E, D

Answer 1

The Correct Option is C

Hierarchy of Share Capital Components

A clear comprehension of the various share capital classifications and their interdependencies is vital for analyzing a company's financial reports. These categories signify distinct phases within the company's process of issuing shares and securing equity financing.

The definitive order of these share capital components is:

1. Authorised Capital: This represents the maximum share capital a company is legally empowered to issue, as stipulated in its foundational constitutional document (Memorandum of Association).
2. Issued Capital: This is the segment of authorised capital that the company has made available to potential investors for purchase.
3. Subscribed Capital: This refers to the portion of issued capital for which investors have committed to acquire.
4. Called-up Capital: This is the segment of subscribed capital that the company has officially requested payment for from its shareholders.
5. Paid-up Capital: This signifies the amount of called-up capital that shareholders have actually remitted to the company.

Ascending Order

Consequently, the accurate progression is Authorised Capital → Issued Capital → Subscribed Capital → Called-up Capital → Paid-up Capital. This establishes Option 3 as the correct selection.