Share capital refers to the issued stock or equity investments made in a company by shareholders, providing permanent capital for operations in exchange for potential ownership claims.
Key Features:
- Comprises authorized, issued and fully paid shares listed on balance sheets
- Voting power allocated proportionally to shares held in shareholder decisions
- Dividends may be paid from profits representing shareholder returns
Example:
A manufacturing startup increased its share capital through a second round of financing from venture capital firms.
Takeaways:
Share capital underpins a company’s financial position and growth potential. Stringent disclosure on share structures protects investors. Flexible issuance supports versatile financing and strategic partnerships over time.