Share Capital
/ʃeə ˈkæpɪtəl/
Discover the concept of share capital, the total value of shares a company can issue to raise funds and provide ownership stakes to its shareholders.
What is Share Capital in Simple Terms?
Share capital represents the money that shareholders invest in a company by purchasing shares.
It forms part of the company's permanent funding and shows how ownership is distributed amongst the shareholders.
How Does Share Capital Work in Practice?
When you set up a company, you decide how many shares to create and their value.
Shareholders then buy these shares, providing the company with funds.
The total amount paid for all shares becomes the company's share capital.
What Are the Different Types of Share Capital?
There are two main types: authorised share capital (the maximum amount a company can issue) and issued share capital (the actual amount currently held by shareholders).
Companies often start with a small issued amount and can increase it later.
Where would I first see Share Capital?
You'll likely first encounter share capital when completing your company incorporation documents, where you'll need to specify how much share capital your company will have and how it's divided among the founders.
How Much Share Capital Does a New Company Need?
Most jurisdictions allow companies to start with minimal share capital, sometimes as little as one share worth £1 or €1.
The amount depends on your business needs and how you want to structure ownership amongst founders and investors.
Can Share Capital Be Changed After Company Formation?
Yes, companies can increase their share capital by issuing new shares or decrease it through various legal procedures.
Any changes typically require shareholder approval and must be filed with the relevant company registry.
What's the Difference Between Share Capital and Share Premium?
Share capital is the nominal value of shares (sometimes called the par value), whilst share premium is any amount paid above this nominal value.
For example, if someone pays €10 for a €1 share, €1 is share capital and €9 is share premium.
Why Does Share Capital Matter for Company Ownership?
Share capital determines ownership percentages and voting rights.
If you own 500 shares out of 1,000 total shares, you typically own 50% of the company and have corresponding voting power in shareholder decisions.
Irish Company Formation
Your Irish company, ready in days — not months.
Join 1,000+ founders who incorporated with Open Forest. We handle the paperwork, you focus on building.
No hidden fees/Fully compliant/Free consultation
