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(114)-SHARE CAPITAL

Sunday, February 21, 2010

Share Capital

The net fixed assets of a company, plus the working capital (i.e. current assets minus current liabilities) minus the long term liabilities, are “financed” by the shareholders’ capital.

Shareholders’ capital consists of both:
  • The nominal value of issued capital (minus any amounts not yet called up on issued shares
  • Reserves.


The share capital itself might consist of both ordinary shares and preference shares. All reserves, however, are owned by the ordinary shareholders, who own the “equity” in the company.


Called up share capital


A company’s issued share capital is it’s called up share capital, provided that there are no shares in issued which have so far only been partly called up.

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