What does the maximum share capital specify?

What does the maximum share capital specify?

• A. The declared aims of business
• B. The maximum amount of share capital the company is authorised to issue.
• C. The registered address.
• D. The number of directors.

Answer: (B)

The main idea here is understanding what “maximum share capital” means. It’s the ceiling on the total nominal value of shares that the company is authorised to issue to investors. This amount is set when the company is formed and is stated in its constitutional documents. It doesn't show how much has actually been issued (that would be issued share capital) or how much shareholders have paid (paid-up capital). If the company wants to issue more shares beyond the limit, it must increase the maximum by amending its articles and getting the necessary approval. This concept is different from the declared aims of the business, the registered address, or the number of directors, which are separate matters altogether.

The main idea here is understanding what “maximum share capital” means. It’s the ceiling on the total nominal value of shares that the company is authorised to issue to investors. This amount is set when the company is formed and is stated in its constitutional documents. It doesn't show how much has actually been issued (that would be issued share capital) or how much shareholders have paid (paid-up capital). If the company wants to issue more shares beyond the limit, it must increase the maximum by amending its articles and getting the necessary approval. This concept is different from the declared aims of the business, the registered address, or the number of directors, which are separate matters altogether.