Answer By law4u team
Share capital in a company means the total amount of money that a company raises from its shareholders in exchange for ownership shares. It represents the ownership funds of the company and forms an important part of the company’s financial structure. Under the Companies Act, 2013 share capital is divided into small units called shares. When a person buys shares of a company, that person becomes a shareholder and gets certain rights such as voting rights, dividend rights, and ownership interest in the company to the extent of the shares held. There are different types of share capital. Authorized share capital is the maximum capital a company is allowed to issue as stated in its constitutional documents. Issued share capital is the portion of authorized capital that the company actually offers to investors. Subscribed capital is the part that investors agree to purchase. Paid up capital is the amount that shareholders have actually paid to the company. Share capital is important because it provides funds for business operations, expansion, and growth. It also determines the ownership pattern and control of the company. Changes in share capital such as increase, reduction, or transfer must follow legal procedures and be reported to the Registrar of Companies as required by law.
