Share capital can be defined as the initial value that partners or shareholders invest in a project at the time of opening.
This value represents the gross amount needed to start the activities of a new company and to keep it, considering the time when it may not yet generate enough profit to keep itself on its own own.
It can then be used to build a company's infrastructure, with equipment, accessories, means of transport, means of communication and everything related to development of business.
When the enterprise is linked to the trade sector, the business registration document must contain the amount of the share capital and how the value will be checked, which can be done in cash or in goods and rights.
Social capital is designed from three important perspectives:
- Financial: which is represented by the initial resources that will be invested and will keep the company “alive” in the initial period of activities;
- Social: represented by the set of rules of relationships between all individuals that make up the company's investing company. These rules are fundamental to define the company's objectives, its form of organization, the power of each partner, beyond the limit of their responsibility;
- Limit of Liability: which is represented by the need to limit the burden of partners, given the growing risks inherent to industrial activity.
See more about the Capital goods.
How to define a company's share capital
To define the share capital, several elements can be considered, especially if the amount to be invested is the result of a company.
Factors such as the amount to be applied by each partner, the know-how and technology implementation are important when defining the amount of capital.
However, it is important that these factors and everything that may be agreed upon in this type of company is thoroughly described in the social contract or not quotaholder agreement. This type of document prevents future disputes over possible corporate changes.
It is most advisable that, in case of doubt, the initial capital of a company starts with BRL 1,000.00 (one thousand reais), since with this amount it is possible to finance the necessary fees and certifications, in addition to being able to hire an accountant to assist in this process initial.
See the meaning of Limited society and Anonymous society.
MEI: share capital for individual entrepreneur
There is also the option to define the share capital from the individual entrepreneur category or individual micro-entrepreneur (MEI), which does not require many limitations to start a business and it is possible to start with any amount and, if necessary, increase later.
See also the meaning of:
Capitalize
capital in economy