To address this issue, we must pinpoint the specific term for the maximum share capital a company is legally permitted to issue, as defined in its Memorandum of Association.
1. The Memorandum of Association Explained:
The Memorandum of Association serves as a foundational legal charter detailing a company's core aspects: its aims, authorities, and operational boundaries. A crucial element within this document is the capital clause, which delineates the upper limit of share capital the company is empowered to distribute.
2. Ascertaining the Correct Terminology:
The maximum share capital a company is authorised to issue, as stipulated in its Memorandum of Association, is identified as 'Authorised Capital'. This designation is also commonly referred to as Nominal Capital or Registered Capital. It represents the ceiling for share capital issuance unless the Memorandum itself is formally revised.
Conclusion:
The quantum of share capital a company is empowered to issue under its Memorandum of Association is termed Nominal Capital.