The correct option for the question regarding parts payments made on allotted shares by subscribers is C. called-up capital. Explanation of the Correct Answer Called-up Capital refers to the portion of the issued capital that a company has requested shareholders to pay. When a company issues shares, it does not always require the full payment upfront. Instead, it may allow shareholders to pay in installments. The amount that the company has called for payment from shareholders is known as called-up capital.

1. Understanding Share Capital Terms:
2. Authorized Capital: This is the maximum amount of share capital that a company is authorized to issue to shareholders as per its memorandum of association. It represents the upper limit of shares that can be issued but does not reflect the actual shares that have been issued or paid for.
3. Subscribed Capital: This is the portion of the authorized capital that investors have agreed to purchase. It indicates the total value of shares that subscribers have committed to buy, but it does not necessarily mean that they have paid for them yet.
4. Issued Capital: This refers to the total value of shares that have actually been issued to shareholders. It includes both paid-up and called-up capital. Issued capital can be fully paid or partly paid.
5. Called-up Capital: This is the part of the issued capital that the company has called for payment. It represents the amount that shareholders are required to pay on the shares they have subscribed to.
6. Why Called-up Capital is the Correct Answer:
7. When subscribers are allotted shares, they may not pay the full amount immediately. The company may call for payment in parts. The payments made by subscribers on these allotted shares are recorded as called-up capital. This is the amount that the company has requested from shareholders and is due for payment.

Explanation of Why Other Options are Incorrect

• A. Authorized Capital: This option is incorrect because authorized capital does not reflect the payments made by subscribers. It merely indicates the maximum limit of shares that can be issued, not the actual payments made.
• B. Subscribed Capital: While this option is related, it is not the correct answer. Subscribed capital refers to the total value of shares that investors have agreed to buy, regardless of whether they have made any payments. It does not specifically indicate the payments made on those shares.
• D. Issued Capital: This option is also incorrect because issued capital includes all shares that have been issued, whether they are fully paid, partly paid, or unpaid. It does not specifically refer to the payments made by subscribers.

Summary of Key Concepts

• Called-up Capital: The amount requested from shareholders for shares they have subscribed to; it reflects payments made on allotted shares.
• Authorized Capital: The maximum limit of share capital a company can issue.
• Subscribed Capital: The total value of shares that investors have agreed to purchase.
• Issued Capital: The total value of shares that have been issued to shareholders, including both paid and unpaid amounts.

Revision Summary

• Called-up capital is the amount requested from shareholders for payment on allotted shares.
• Authorized capital is the maximum limit of shares a company can issue.
• Subscribed capital is the total value of shares agreed to be purchased by investors.
• Issued capital includes all shares issued, regardless of payment status.

Understanding these terms is crucial for grasping the financial structure of a company and the obligations of shareholders.