Share Capital

Share capital or capital stock (US English) refers to the portion of a company's equity that has been obtained (or will be obtained) by trading stock to a shareholder for cash or an equivalent item of capital value. For example, a company can issue shares in exchange for computer servers, instead of purchasing the servers with cash.

The term has several meanings. In its narrow, classical sense, still commonly used in accounting, share capital comprises the nominal values of all shares issued (that is, the sum of their "par values"). In a wider sense, if the shares have no par value or the allocation price of shares is greater than their par value, the shares are said to be at a premium (called share premium, additional paid-in capital or paid-in capital in excess of par); in that case, the share capital can be said to be the sum of the aforementioned "nominal" share capital and the premium. In the modern law of shares, the "par value" concept has diminished in importance, and share capital can simply be defined as the sum of capital (cash or other assets) the company has received from investors for its shares.

Besides its meaning in accounting, described above, "share capital" may also be used to describe the number and types of shares that compose a company's share structure. For an example of the different meanings: a company might have an "outstanding share capital" of 500,000 shares (the "structure" usage); it has received for them a total of 2 million dollars, which in the balance sheet is the "share capital" (the accounting usage).

The legal aspects of share capital are mostly dealt with in a jurisdiction's corporate law system. An example of such an issue is that when a company allocates new shares, it must do so in a way that does not inequitably dilute existing shareholders.

Read more about Share Capital:  Types of Share Capital

Other articles related to "capital, share capital, shares":

Cyprus Development Bank - Evolution
... After 1985, CDB launched its equities and venture capital operations ... Investment Bank, acquired 5.5% of CDB's share capital ... In 1996 EIB’s share capital was increased to 12% ...
Stord Airport, Sørstokken - History - Construction
... It received NOK 7.18 million in increased share capital and 21 new owners, including increased share capital from Bømlo, Kvinnherad and Tysnes ... The board had attempted to raise capital by marketing the airport as a "people's airport" and hoping that many locals would purchase shares, but the attempts failed. 17.2 million as the company had NOK 17.9 million in share capital at the time, it was debt-free ...
Types of Share Capital
... Authorised share capital is also referred to, at times, as registered capital ... It is the total of the share capital which a limited company is allowed (authorised) to issue ... the upper boundary for the actually issued share capital ...
Sipchem
... It was incorporated on 22 December 1999 with a paid-in capital of SR 500 million ... The share capital was initially increased in 2003 by issuing 3 million shares, thereby raising the capital to SR 650 million ... Subsequently, in April 2005 the share capital was further raised for the second time by SR 850 million resulting in a total share capital of SR 1.5 ...
Companies Act 2006 - General Provisions
... Share capital - the requirement for an authorised share capital will be abolished ... Companies will be able to redenominate their share capital from one currency to another without an order of the court ...

Famous quotes containing the words capital and/or share:

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