Question

Which of the following should be deducted from the called-up capital to find out paid-up capital?

• A. Call-in-advance
• B. Calls-in-arrear
• C. Share Forfeiture
• D. Premium

Hint:

Remember: Paid-up Capital = Called-up Capital – Calls-in-arrear.

Answer 1

The Correct Option is B

Step 1: Called-up capital meaning.
Called-up capital is the portion of subscribed capital which the company has asked shareholders to pay.
Step 2: Paid-up capital meaning.
Paid-up capital is the actual amount received from shareholders out of the called-up capital.
Step 3: Adjustment.
If some shareholders fail to pay the called-up amount, it is called “Calls-in-arrear”. Therefore, \[ \text{Paid-up Capital} = \text{Called-up Capital} - \text{Calls-in-arrear} \]
Step 4: Conclude.
Hence, Calls-in-arrear is deducted from called-up capital to arrive at paid-up capital.
Final Answer: \[ \boxed{\text{Calls-in-arrear}} \]