What is share capital?

What is share capital?

April 11, 2019

So there is a common question frequently asked as to what share capital really means. Here is a detailed answer to that question.

Share capital 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 has 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.
With share capital, the amount a company reports on its balance sheet only accounts for the total amount initially paid by shareholders. If those shareholders later resell their shares on the secondary market, any difference between the initial and subsequent sales prices does not impact the company’s share capital.
It is worthy of note that the term “share capital” is often used to mean slightly different things, depending on the context. When discussing the amount of money a company can legally raise through the sale of stock, there are actually several categories of share capital. Accountants have a much narrower definition.

 

 

Team 618 Bees

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.

  • Must my Company Secretary be a Lawyer?

    Although it’s ideal to have a lawyer as a company secretary, it is not compulsory for small private businesses.

  • What is an execution clause in a contract?

    This is the section in which the parties sign the contract or agreement.

  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.

  • Is it legal to transfer the personal data you obtained legally to another person?

    No, its not legal. This is because the law prohibits anyone from transferring the data of a third party to another person without consent from the third party to do same even if the data was rightfully obtained in the first instance.

  • Does a trademark search automatically reserve my trademark name?

    No, a trademark search does not automatically reserve that which is sought to be trademarked. A search ascertains whether that which is sought to be trademarked is available or violates any existing trademark.

  • What will happen if I buy the wrong category of forms with NAFDAC?

    Nothing, the purchased form will be in your account for future use.

     

  • What is the first thing I must do to register a business in Nigeria?

    To register a business in Nigeria; you would need to conduct a name search of the business. You can achieve this using your CAC-CRP account.

  • Why do I need a trademark?

    You need to register your trademark because if you don’t register it, someone else can! It helps identify you as the source ad indicates a consistent level of quality of your products and services. Securing a registered trademark protects your brand, and provides you with tools to prevent someone else from using similar signs and riding off the back of your business.

Call Us Now on +234 901 719 0079 Whatsapp icon Chat on WhatsApp