Share capital is the total nominal value of the shares a company has issued to its shareholders. It is shown on the balance sheet under capital and reserves, usually as called up share capital.
How it is made up
Every share has a fixed nominal value, such as £1. A company that has issued 100 ordinary shares of £1 each has share capital of £100. A private company has no minimum, and many are formed with a single £1 share.
- If shares are issued for more than their nominal value, the extra goes to a separate share premium account.
- Shares issued but not yet paid for are shown as an amount owed by the shareholders.
- A company can have more than one class of share, with different rights to votes and dividends.
Where it appears
Share capital sits at the foot of the balance sheet with the reserves. It does not change with profits or losses; it only changes when shares are issued, bought back or cancelled, and Companies House has to be told when that happens.
A company limited by guarantee has no share capital. Its members guarantee a fixed amount instead.
Read more: The share capital note and The company limited by guarantee note.