Question

What is meant by Share Capital?

Hint:

Share capital = funds raised by issuing shares; represents ownership in the company.

Answer 1

Share capital refers to the total amount of money raised by a company through the issue of shares to shareholders. It represents the ownership interest of members in the company and forms the main source of long-term finance. When individuals purchase shares, they contribute funds to the company, which can be used for expansion, operations or investment. Share capital may be classified into authorised, issued, subscribed, called-up and paid-up capital, depending on how much the company is permitted to raise and how much has been actually received. Share capital gives shareholders voting rights, dividend entitlement and a share in the company's assets at the time of winding up.