- 1 Marks
BCL – L1 – SA – Q9 – Types of Capital
Question
What is the purpose of share capital in a company?
A To pay employee salaries
B To distribute profits to shareholders
C To provide a financial base for the company
D To fund charitable activities
Answer
C
Explanation:
Share capital provides a financial base for a company, representing funds raised by issuing shares to support operations and growth. It is not for paying salaries (A), distributing profits (B), or funding charity (D). Option C is correct.
- Tags: Company Financing, Corporate law, Share Capital
- Level: Level 1
- Uploader: Samuel Duah