Unit 4: Corporate Capital
4.1 Meaning of Capital and Its Types
Capital = the company’s owned funds — the shareholders’ money in the venture, against which the business trades (distinguishing itself from borrowed funds — 4.15). The types’ ladder (the exam map):
| Type | Meaning |
|—|—|
| Authorised/registered capital | The MOA’s ceiling — the maximum share capital the company may issue (alterable only by the MOA route — 4.11) |
| Issued capital | The portion actually offered to subscribers |
| Subscribed capital | The portion taken up (subscribed for) |
| Called-up capital | The portion the company has called in |
| Paid-up capital | The portion actually paid (the company’s real equity base) |
| Uncalled/unpaid capital | The members’ residual exposure (the limited liability’s cushion — callable on winding up) |
Beside them: share premium (the above-par excess — 4.6), reserves and free reserves (the undistributed profits’ pools), and capital reserves‘ discipline (the non-distributable core).
4.2 Meaning and Nature of a Share
A share = the member’s interest in the company, measured by a sum of money — a bundle of rights (economic: dividend and winding-up surplus; governance: vote and information) against the company, not a title to its assets. Its nature: movable property (transferable — the Companies Act 2063’s discipline), a chose-in-action’s statutory personification; the shareholder’s liability limited to its unpaid amount. The share is not the company’s property — it is the shareholder’s; the company’s property is its own (Sumargi Parajuli, Unit 1).
4.3 Types of Shares
The classical two families — equity (ordinary) shares and preference shares — plus the modern specials: sweat equity (4.7), differential-voting-rights shares (4.8), bonus shares (4.9, a form of issue), rights shares (4.10, an offer route), and the redeemable faces (preference shares redeemable at the company’s option or on terms).
The share-transfer discipline’s prescribed case:
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