The issued capital is defined as the group of shares that a certain company places for sale and at the disposal of shareholders, investors or the general public. Therefore, it refers to the value of the shares that are put into full circulation for sale. Issued capital definition
This can be carried out, in order to supplant the retirement of any of the shareholders, to increase the capital or by the formation of a new company and thus optimize the assets of the company. The shares that the company does not put into circulation are known as the unissued capital.
The capital issued in the economy comprises a series of characteristics such as the following:
- Its value is identified as the book value issued by the shares that are in the hands of the shareholders. Issued capital definition
- It is a capital that is also known by the name of subscribed capital.
- It has the ability to vary depending on how the company evolves.
- It is made up of the nominal capital and the issue premium, referring to the amounts contributed by the shareholders when all the shares are issued. Issued capital definition
- The remaining equity does not make up the issued capital, which means that any reserve is obtained from the profits that are not distributed from the shareholders’ contribution.
- The shares that have already been canceled, should not be calculated like the treasury shares in the asset that belong to the company.
- Generally, the authorized capital issued is below the authorized capital, which corresponds to the maximum amount of capital that the company authorizes in advance.
- Companies that issue shares to attract new shareholders to increase capital, however, the issued capital can go up or down depending on the new shares being issued at a value higher or lower than the anticipated capital increase.
Examples of issued capital
- The concept of issued capital refers to the total value of shares that companies place on the market for sale. Issued capital definition
- When a company places its shares on the market of its capital, this capital is identified as the total value of shares that will be placed for sale to investors.
- The capital increase is carried out, creating new participations or shares, increasing the value of the existing ones or the capital received by the new contribution of money.