What is 'reserved capital' and 'unreserved capital' ??

Dear Student,

Reserve Capital:

It is the capital which will not be called during the lifetime of the company, but will be called on liquidation when the company will reach its end. The company directors take this decision.

Reserve capital is created out of uncalled capital of the company.

.Unreserved Capital:

Capital other than Reserve Capital.


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It is that part of capital which is not issued and can be issued only when company goes under liquidation

It is not earned by company in the normal course of business; rather, it is created out of capital profits by the company.
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