Which statement is true about the share capital under CO?

Which statement is true about the share capital under CO?

• A. Shares have no nominal value; no requirement to have authorized capital (different form issued capital)
• B. Shares have a nominal value and require authorized capital
• C. There is a fixed minimum share capital
• D. There is no share capital under CO

Answer: (C)

Under the CO, a company limited by shares must have a minimum amount of share capital paid up at incorporation. This fixed minimum sets a floor for the initial capitalization, ensuring the company starts with some funded capital and providing a basic level of credibility to creditors. The idea that there is no nominal value or no authorized capital, or that there is no share capital at all, does not fit this framework. So the true statement is that there is a fixed minimum share capital.

Under the CO, a company limited by shares must have a minimum amount of share capital paid up at incorporation. This fixed minimum sets a floor for the initial capitalization, ensuring the company starts with some funded capital and providing a basic level of credibility to creditors. The idea that there is no nominal value or no authorized capital, or that there is no share capital at all, does not fit this framework. So the true statement is that there is a fixed minimum share capital.