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Proposed issued capital ?
Would appreciate if someone can kindly advise what is the following in simple terms:
1) Proposed issued capital
2) Proposed amount to be paid on incorporation
What is the implication if the company go bust ? (In other words, what is the effect of (1) & (2) if the company go bust ?)
1 Answer
- europeaninlaLv 41 decade agoFavorite Answer
proposed simply means "not yet approved", i assume it's one the agenda of some General Meeting and once approved it can have some effects, if it doesn't get approved it would not have any effect. Note that the term "proposed ..." can be used in a legally binding contract and then it's nearly as good as the actual decision.
I assume you are in the process of starting your own company, in this context I will answer your questions.
The issued capital is the amount of capital that will be "issued", it means at the incorporation the founders will invest (or promise to invest) this amount in the company, if the company go "bust" they loose this money.
The amount to be paid on incorporation is closely connected with the issued capital, it's the actual amount of money the shareholders will put on the table (the remaining part is only a promise to pay later) at the incorporation.
Source(s): work in venture capital