Share Capital

Tax Glossary Definition

Share Capital

Share capital is the money a company receives from investors in exchange for issuing ownership shares, which may be either ordinary (common) or preference shares. Often called capital stock, it signifies the portion of the company owned by its shareholders. In contrast to shareholders’ equity, share capital represents only the proceeds from the sale of shares and does not account for retained profits or other reserves.

Example: When a company issues 1,00,000 shares at ₹10 each, its total share capital equals ₹10,00,000.

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