Share Capital

What is Share Capital? 

Share Capital is the funds a company gains from issuing stocks. It's different from shareholder’s equity as it doesn't include retained earnings. 

Companies issue shares to investors or the public to finance business growth. Share capital strengthens a company’s financial standing and can be grown through further public offerings. 

Share Capital and the Balance Sheet

On a balance sheet, Share Capital is found under “shareholder’s fund.” This section usually lists common stock, preferred stock and additional paid capital. The maximum amount a company can raise is the authorized share capital. Sale proceeds are recorded at nominal par value. 

Share capital in the balance sheet only includes direct payment for acquisitions. It is not affected by later trades or market fluctuations of the securities.