Meaning and Types of Share Capital and Methods of Raising Capita
Share capital is the ownership capital of a company raised by the issue of its shares. It is the document that acknowledges the ownership of a company to the limit of the amount contributed. The different types of share capital are authorized share capital, issued capital, subscribed capital, called-up capital and paid-up capital. This note describes the different types of share capital which helps to understand the concept and meaning of these different share capital.
A Share can be defined as unit of share capital reflecting the extent of interest of a shareholder. Two major types of shares are ordinary shares and preference shares. A preference share might be cumulative or non-cumulative, redeemable or Irredeemable, Convertible or Non-convertible and participating or non-participating according to their nature and the policy of the company.