Share capital definition/detailed description

Share capital can be defined as the initial value that partners or shareholders invest in a venture at the time of opening. Share capital definition

This value represents the gross amount needed to start the activities of a new company and to maintain it, considering the time in which it may still not generate enough profit to maintain itself.

It can then be used to assemble the infrastructure of a company, with equipment, accessories, means of transport, means of communication and everything related to the development of the business.

When the enterprise is linked to the commercial sector, the commercial registration document of the business must include the amount of the share capital and how the value will be checked, which can be done in cash or in goods and rights. Share capital definition

Social capital is thought of from three important perspectives:

  • Financial: which is represented by the initial resources that will be invested and will keep the company “alive” in the initial period of activities;
  • Social: represented by the set of relationship rules between all the individuals that make up the company’s investing society. These rules are fundamental to define the company’s objectives, its form of organization, the power of each partner, in addition to the limit of its responsibility;
  • Limit of liability: which is represented by the need to limit the burden of the partners, given the growing risks inherent to industrial activity. Share capital definition

How is the share capital of a company defined?

Several elements can be considered when defining a company’s share capital, especially if the amount to be invested is the result of a company.

Factors such as the amount to be invested by each partner, the know-how and the implementation of the technology are important when defining the amount of capital.

However, it is important that these factors and everything that may be agreed in this type of company is detailed in the articles of association or in the quota holder agreement . This type of document avoids future disputes in eventual corporate changes. Share capital definition

The most advisable thing is that, in case of doubts, the initial capital of a company starts with R$ 1,000.00 (one thousand reais), since with this amount it is possible to finance the necessary fees and certifications, in addition to being able to hire an accountant to assist in this initial process.

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