2 min read
Definition
Share capital is the total value of shares a company has issued to its shareholders in exchange for their investment. It sits in the equity section of the balance sheet and represents ownership, not debt.
In plain terms
It's the founding money owners put in by buying shares. Unlike a loan, it doesn't have to be repaid — investors get their return through dividends and the growing value of the company.
Why it matters for your company
Lenders read share capital as a sign of the owners' own stake in the business. A company funded partly by real equity looks steadier than one relying wholly on debt. See equity vs debt finance.
Related reading
Equity vs debt finance: a director's guide
You can fund growth two ways: sell a slice of the company (equity) or borrow and repay (debt). Equity costs…
Read →
How to read a balance sheet
A balance sheet is a snapshot of what your company owns, what it owes, and what's left over for the…
Read →Share premium
Share premium is the extra amount investors pay for shares over their nominal value — money held in a special…
Read →Company Reserves, Retained Earnings and Dividends: A Director's Primer
Retained earnings accumulate every year the company makes a profit and are the source from which dividends…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.