Paid-up capital
Paid-up capital refers to the amount of capital actually received from shareholders in the shares issued by a joint stock company. Paid-up capital is the basic capital of a joint stock company and represents the actual contribution of shareholders to the company.
Definition: Paid-in capital refers to the amount of capital that a company has received from shareholders in exchange for shares of stock. It represents the actual investment made by shareholders in the company.
Origin: The concept of paid-in capital originated with the development of joint-stock companies. As early as the 17th century, with the establishment of early joint-stock companies like the East India Company, paid-in capital became an important component of company capital. With the development of modern corporate law, the concept of paid-in capital has been further standardized and clarified.
Categories and Characteristics: Paid-in capital can be divided into common stock and preferred stock. Common stock represents basic shareholder rights in the company, including voting rights and dividend rights. Preferred stock typically has priority over common stock in dividends and liquidation but may not have voting rights. Characteristics of paid-in capital include: 1. Represents actual shareholder investment; 2. Is a crucial part of the company's capital structure; 3. Affects the company's financial stability and credit rating.
Case Studies: Case 1: A tech company raises 100 million yuan by issuing 10 million shares of common stock at 10 yuan per share through an initial public offering (IPO). This 100 million yuan is the company's paid-in capital. Case 2: A manufacturing company raises 100 million yuan by issuing 5 million shares of preferred stock at 20 yuan per share. This 100 million yuan is also part of the company's paid-in capital but has priority over common stock in dividends and liquidation.
Common Questions: 1. What is the difference between paid-in capital and registered capital? Paid-in capital is the actual amount received from shareholders, while registered capital is the total capital registered with the business registry. 2. Can paid-in capital change? Yes, it can be adjusted through capital increases or decreases.
