Issued capital (or share capital) consists of all funds raised by the company in exchange for shares or common stock. It comprises the initial investment when the company was created and the subsequent additions of share capital (or less commonly reductions). The issued capital comprises all shares at their face (or nominal) value.
A new company that was created with issuance 500.000 shares with a face value of 1€ per share has a share value of 500.000€.
While investing in the company’s share capital, equity holders can invest in cash or non-cash items:
- Whenever it is legally allowed, investors can transfer the possession of an asset to the company as mean to complete their investment.
- While a merger or acquisition process, the acquiring company may offer shares of the resulting company.
In the event of bankruptcy, common stock investors receive any remaining funds after bondholders, creditors (including employees), and preferred stockholders are paid. As such, common stock investors often receive nothing after bankruptcy.