Share Capital

Share capital is all capital raised by a company via the sale of common or preferred stock in the primary market. Secondary market sales do not impact share capital. Additional capital may be raised if the company obtains authorization to raise more via the sale of additional company stock.

Usually, the term share capital refers to issued share capital.

Issued Share Capital / Paid Up Share Capital / Paid In Share Capital

Issued share capital is the amount of authorized share capital that has been issued.

Also known as:

• Paid up share capital • Paid in share capital

Authorised Share Capital / Registered Capital / Nominal Capital

• Authorised share capital is the maximum amount of share capital a company is authorized to raise, which may exceed the amount of issued share capital thus far.
Other names:

• Registered capital • Nominal capital

Fully Paid Up Share Capital

• Fully paid up share capital is when paid up share capital (a.k.a. issued share capital) equals authorized share capital, meaning no additional share capital can be issued.

Par Value / Contributed Capital / Shareholder Equity

• When authorizing shares, a company may assign a par value, often lower than the sale value. • The additional capital raised over par value is called contributed capital. • Example: 1000 shares with a par value of £1 sold for £50 each results in: • £1,000 par value • £49,000 contributed capital • shareholder equity increases by the amount raised, e.g., £50,000. Source

Partly Paid Shares

• If shares are sold for less than par value, they are partly paid shares. The issuer can call upon investors to pay the remaining value. • When par value is paid, shares become fully paid shares.
Q Questions
• By whom and how is authorization for additional shares made?