What is ‘Share Capital’? The Share Capital is the sum of money received by a company after selling its shares to the investors. It consists of all funds raised by a company in exchange for shares of either common or preferred shares of stock. The amount of share capital or equity financing a company can change over time. A company that wishes to raise more equity, can obtain authorization to issue and sell additional shares, thereby increasing its share capital. The amount of total share capital cannot be more than the amount of authorized share capital of a company. Increase in market price of shares does not affect its value because share capital is calculated based on the par value of shares and not on the basis of market price. Types It can be bifurcated as authorized, issued, subscribed, called-up and paid-up share capital.
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