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What is Nominal capital of a Kenyan company

Nominal capital also commonly referred to as authorized capital refers to the designated or assigned share capital of a company and represented in value of shares of the company.

The authorized capital is the maximum amount of capital that the company is authorized by its Memorandum and Articles of Association. This Nominal capital is available to be allocated as shares to the subscribers and other shareholders of the company. Nominal capital therefore refers to the amount of capital, in shares, a company through its constitution or Articles is authorized have and issue to its shareholders.

It is not necessary to issue all the nominal capital in terms of shares to the subscribers or shareholders, part of the Nominal or authorized capital may remain unissued or unallocated.

Types of Nominal Capital in Kenya.

  • Issued capital.
  • Paid up capital.
  • Uncalled capital.
  • Called up capital.

Types of nominal capital explained.

Issued Share Capital.
Issued Share Capital is the total number of the share in a company issued to the shareholders. Under Kenyan company Law, the issued share capital does not have to be paid up, however, the shareholder’s liability is limited to the amount that remains unpaid in the shares.

Paid Up Capital.
Paid up capital is the amount of capital in a company which is funded by the shareholders. Paid up capital can never be more than the authorized capital. A company raises its capital investment from the paid up capital..

Called-Up Share Capital .
Share may be issued to subscribers and shareholders with the understanding they will be paid up at a later date. This allows shareholders to pledge to contribute more share capital than if they had to provide funds up front. The amount of share capital shareholders owe, but have not paid, is referred to as called-up capital, It is that amount of issued capital which the company has asked its shareholders to pay by means of calls.

Uncalled capital.
This is the amount which remains unpaid on shares. The company may at any time, call upon the shareholders to pay the uncalled capital in accordance with the provisions of the articles..

(Reserve capital .
Reserve capital as that portion of the issued but uncalled- up capital of a limited company, which the company’s members by special resolution, have resolved that the company shall not call up unless and until it is in liquidation. .


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