Share Capital

Share capital refers to the total amount of capital that a company raises through the sale of its shares. Companies raise share capital by issuing shares of stock to investors, who then become shareholders and owners of the company. Share capital can be divided into two main types: authorized share capital and issued share capital. Authorized share capital is the maximum number of shares that a company is authorized to issue, while issued share capital is the number of shares that have actually been issued to investors. In addition to these two main types of share capital, there are also different classes of shares that companies can issue, such as common shares and preferred shares. Common shares represent ownership in the company and typically carry voting rights, while preferred shares may have priority in terms of dividends and liquidation proceeds. The amount of share capital that a company raises can have a significant impact on its financing structure and ownership structure. Companies may use share capital to fund growth and expansion, or to finance acquisitions and other strategic initiatives. Share capital can also be used to dilute the ownership of existing shareholders, or to provide liquidity for shareholders who wish to sell their shares. Overall, share capital is a critical component of a company's financing structure, providing a source of capital that can be used to fund growth and create value for shareholders. The type and amount of share capital that a company raises can have a significant impact on its ownership structure, as well as its ability to raise additional capital in the future.