Share capital

Share capital (or capital stock in US English) refers to the portion of a company's equity that has been obtained by trading stock to a shareholder for cash.

In its strict sense, as used in accounting, share capital comprises the nominal values of all shares issued (that is, the sum of their par values, as printed on the share certificates). If the allocation price of shares is greater than their par value, e.g. as in a rights issue, the shares are said to be sold at a premium (called share premium, additional paid-in capital or paid-in capital in excess of par). Commonly, the share capital is the total of the aforementioned nominal share capital and the premium share capital.