Share Capital

The net fixed assets of a company, plus the working capital (i.e. current assets minus current liabilities) minus the long term liabilities, are “financed” by the shareholders’ capital.

Shareholders’ capital consists of both:
>The nominal value of issued capital (minus any amounts not yet called up on issued shares
>Reserves.

The share capital itself might consist of both ordinary shares and preference shares. All reserves, however, are owned by the ordinary shareholders, who own the “equity” in the company.