Write short notes on The reserve capital

• This is reserve capital or liability.
• It is a portion of capital which a company may create by special resolution.
• Under the provisions of the companies Act, a company may resolve by special resolution that the whole or any part of its uncalled up capital shall not be capable of being called up except in the event of or for purposes of winding up. This is the reserve capital. It cannot be dealt with otherwise.
• Cannot be reconverted to ordinary uncalled up capital.
• Cannot be used as a security for a loan.
• It is available to creditors in the event of winding up.

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