Explain the following concept:

Capital Clause

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1 Answers

  • This clause states the amount of capital with which the company is registered. 
  • The capital with which the company is registered is called registered capital or authorized capital.
  • A company can issue only that number of shares that are authorized by its memorandum. 
  • The company has to alter the capital clause if the company wants to issue more shares than authorized capital.

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