In this post we will discuss about Reserve capital And capital Reserve..
📌What is Reserve Capital ?
📌Define Reserve Capital.
📌What is Capital Reserve? Define
📌 Define Capital Reserve.
📌 Difference between Reserve Capital and Capital Reserve.
Reserve capital: A company by special resolution regulate that any portion of a share capital which has not been already called up shall not be capable of being called up, other than the event of winding up of the company. such type of share capital is known as reserve capita l. Sec {65} of the companies act 2013.
capital reserve: is that part which is made out of capital benefits and usually not available for distribution as dividend.
Difference between Reserve capital and Capital Reserve
| Reserve capital | Capital reserve |
|---|---|
| Reserve capital Reserve capital is a part of uncalled capital ,which shall not be called other than in the event of winding up of the company. | Capital reserve .It is that portion of the reserve which is not free for distribution as dividend. |
| Reserve capital .It is made out of uncalled capital | Capital reserve .It is made out of capital profits. |
| Reserve capitalIt is not compulsory to create reserve capital. | Capital reserve Capital reserve is mandatory to be made in case of profit on reissue of forfeited shares. |
| Reserve capitalIt is not to be revealed in the balance sheet of the company | Capital reserve Capital reserve is to be shown in the liability side of the balance sheet of a company under the heading reserve and surplus. |
| Reserve capitalReserve capital cannot be used to write off capital losses. | Capital reserve Capital reserve is utilised to write off capital losses and to issue bonus shares to shareholder. |