In case of companies in India, the Reserve Capital __:

  1. is part of authorized capital
  2. can be used only in case of liquidation of the company

Which of the above is / are correct statements?

Answer: [C] Both 1 & 2

Both the statements are correct. Reserve capital is a part of authorised capital to company whereas, capital reserve do not form a part of it, it is infact created from revaluation of company’s asset or selling fixed assets of the company.

This question is a part of GKToday's Integrated IAS General Studies Module