A:

Subscribed share capital, which is what investors have expressed an interest in, is very different from issued share capital, which is the actual issued stock.

Share capital refers to the amount of funding a company raises through the sale of shares of stock to public investors. Share capital constitutes the main source of equity financing and can be generated through the sale of common or preferred shares.

Though share capital refers to a dollar amount, it is dictated by the number and selling price of a company's shares. For example, if a company issues 1,000 shares for $25 per share, it generates $25,000 in share capital. Share capital falls into one of several categories, depending on where the company is in the equity-raising process. They include:

Authorized Share Capital: The maximum amount of share capital a company is allowed to raise is called its authorized capital. Though this does not limit the number of shares a company may issue, it does put a ceiling on the total amount of money that can be raise by the sale of those shares.

Subscribed Share Capital: When a company prepares to "go public" by issuing stock for the first time, investors can submit an application expressing their desire to participate. Subscribed share capital refers to the monetary value of all the shares for which investors have expressed an interest.

Issued Share Capital: Issued share capital is simply the monetary value of the shares of stock a company actually offers for sale to investors. The number of issued shares generally corresponds to the amount of subscribed share capital, though neither amount can exceed the authorized amount.

Called-Up Vs. Paid-Up Share Capital: Depending on the business and applicable regulations, companies may issue stock to investors with the understanding the investors will pay at a later date. Any funds due for shares issued but not fully paid for are called-up share capital. Any funds remitted for shares are considered paid-up capital.

RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    Find out about the difference between called-up and paid-up share capital, including an explanation of the four categories ... Read Answer >>
  2. What is the difference between paid-up capital and share capital?

    Issued share capital and paid-up capital are the total amount of capital funded by a company's shareholders. Authorized share ... Read Answer >>
  3. What types of capital are not considered share capital?

    Find out what types of capital are not considered share capital, including an explanation of the different types of share ... Read Answer >>
  4. Why is the value of capital stock important to public shareholders?

    Understand what capital stock is and how it's issued and authorized. Learn why the value of capital stock important to public ... Read Answer >>
  5. Why is an increase in capital stock on a company's balance sheet a bad sign for stockholders?

    Understand what capital stock represents for a company and understand the significance for investors when a company initiates ... Read Answer >>
  6. How does monetary policy influence the Fisher effect?

    Find out if paid-up capital generated by the sale of stock has to be repaid by the issuing company and how these funds are ... Read Answer >>
Related Articles
  1. Small Business

    Contrasting Paid-Up Capital And Share Capital

    Before a publicly traded company can sell stock, it must set a limit on the amount of capital it’s authorized to raise by selling those shares.
  2. Managing Wealth

    What is Capital Stock?

    Capital stock refers to the number of authorized shares a corporation may issue, both common and preferred.
  3. Small Business

    Understanding Capital

    Capital has a variety of meanings, but it generally refers to financial resources.
  4. Small Business

    Explaining Cost Of Capital

    Cost of capital is the cost of funds used to finance a business.
  5. Investing

    What's Share Capital?

    Share capital, also called equity financing, is the total amount of money and property a company has received for selling its shares to shareholders.
  6. Small Business

    Understanding Capital Investment

    Capital investment is a term that describes a company’s expenditures for long-term assets used in the operation of its business.
  7. Investing

    Ares Capital (ARCC) to Buy Rival for $3.4 bln (ARCC, ACAS)

    Private equity firm Ares Capital inks deal to acquire smaller rival American Capital for $3.4 bln in stock and cash.
  8. Investing

    The Basics Of Outstanding Shares And The Float

    We go over different types of shares and what investors need to know about them.
  9. Investing

    What's A Company’s Worth, And Who Determines Its Stock Price?

    A company’s worth is the same as its market capitalization. Market capitalization is stock price multiplied by number of outstanding shares.
  10. Investing

    Financial Markets: Capital vs. Money Markets

    Find out the similarities and differences between these two commonly used components of the financial markets.
RELATED TERMS
  1. Share Capital

    Funds raised by issuing shares in return for cash or other considerations. ...
  2. Paid-Up Capital

    The amount of a company's capital that has been funded by shareholders. ...
  3. Capitalization Of Profits

    Converting a company's retained earnings, which represent the ...
  4. Capital Investment

    Funds invested in a firm or enterprise for the purposes of furthering ...
  5. Capital

    1) Financial assets or the financial value of assets, such as ...
  6. Capital Markets

    Capital markets are markets for buying and selling equity and ...
Hot Definitions
  1. Payback Period

    The length of time required to recover the cost of an investment. The payback period of a given investment or project is ...
  2. Collateral Value

    The estimated fair market value of an asset that is being used as loan collateral. Collateral value is determined by appraisal ...
  3. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  4. Current Account

    The difference between a nation’s savings and its investment. The current account is defined as the sum of goods and services ...
  5. Liability

    Liabilities are defined as a company's legal debts or obligations that arise during the course of business operations.
  6. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
Trading Center