BANKING AFFAIRS

Detailed explanation-1: -Capital Clause: This clause details the maximum capital a company can raise, also called the authorized/nominal capital of the company. It also explains the division of such capital amount into the number of shares of a fixed amount each.

Detailed explanation-2: -The Memorandum of Association aka MOA contains the capital a company is authorised to raise by issuing shares to the shareholders. It is known as Authorised Capital, Registered Capital or Nominal Capital. The limit of Authorised Capital has to be mentioned in the Memorandum of Association under the Capital Clause.

Detailed explanation-3: -The fifth clause of the MOA, the capital clause, states the company’s share capital. The clause must specify the total number of share capital with which the company must be registered, the number of shares of each kind and the face value of each share.

Detailed explanation-4: -The authorised capital is the maximum amount of capital for which the Company can issue shares to the shareholders. As per Section 2(8) of the Companies Act, 2013, the Authorised Capital limit is specified in the Memorandum of Association under the Capital Clause.

Detailed explanation-5: -The capital clause lists information about the total capital held by the proposed company. This amount is called the company’s authorized capital.