Month End Glossary

Share Capital

Share capital refers to the funds a company raises from investors by issuing shares of its stock. It reflects the initial and subsequent amount of funding invested in exchange for ownership in the company's equity.

Share capital represents the funds that have been contributed to a company by its shareholders through the purchase of shares. This forms a critical aspect of the company's equity and typically serves as a primary source of funding during its earlier stages or subsequent expansions. Share capital can be categorized into two types: authorized share capital, which is the maximum value of shares a company is permitted to issue as per its corporate charter, and issued share capital, which refers to the actual shares issued to shareholders. For example, if a company issues 1,000 shares at $10 each, the share capital will amount to $10,000. Share capital demonstrates the owner's equity commitment and can vary depending on whether the shares are common or preferred stock. It is recorded in the equity section of the company's balance sheet. Both small startups and large multinational corporations manage share capital to support operations and growth.

Related Terms

Make your next Month End easy.
Start your free trial today.

Your first Month End free. We’ll import your existing checklist. It’s 2025 - time to get control of your Month End close process!