To open any enterprise or company, start-up capital is required, that is, a fund of funds intended for starting a business. If the authorized capital is formed on the basis of shares of members in exchange for receiving shares, then each owner has his own share capital. The total size of this indicator can be calculated as the difference between the assets and liabilities of the company.
The management of the newly created organization must properly dispose of the available funds. Equity is a manageable value and should be regulated in accordance with rapidly changing market conditions. There are several types of shares, so the formation of funds can be carried out in several scenarios. As a rule, it is considered advisable to combine preferred and ordinary shares, the main subtlety is the choice of the right proportion. Preferred shares provide the owner with a stable income in a fixed amount, however, the profit of the ordinary type of these securities may be higher, but the payments are not always stable.
The authorized capital of the company expresses the nominal value of all issued shares. According to the current legislation, a legal entity has the right to issue ordinary and preferred shares of any kind, but their proportion should not be violated and is 75% and 25%, respectively. In addition, the law provides for a minimum share capital. For an open society, it amounts to 1000 minimum wages or minimum wages, and for registration of a closed society only 100 minimum wages are required. If the number of shareholders of a legal entity exceeds 50, then each of them must be registered in the documents of the company.
The capital of the joint-stock company is subject to adjustment if there are serious reasons for that. As a rule, the head of an enterprise takes measures to increase or decrease capital, as well as to change its structure. The increase is required in situations where there is a need to attract finance for the long term, and borrowed funds are an expensive pleasure. This is achieved by increasing the par value of each share or increasing their number through an additional issue. Equally, equity is reduced by reducing the face value or number of shares.
A change in the structure of the authorized capital refers to qualitative changes in the proportional distribution of shares. The decision on the restructuring is taken by general agreement of the shareholders at the annual meeting. After obtaining permission, the company management carries out a procedure for splitting shares, that is, exchanging them for the same securities of lower par value. This method is considered relevant for companies whose nominal value of shares is high enough, which means that this is a high risk for the investor. Crushing helps investors in the first place and helps to attract them. And the tax burden is reduced for owners .
Consolidation is the opposite of splitting, that is, combining securities into one group or category. It also aims to increase investment capital by improving the reliability of stocks. The primary goal of this procedure is to provide comfort for the owners of the funds.
I would like to separately note the period in which the share capital should be formed. After collecting and filing all the documents necessary for the formation of a legal entity, it is necessary to start issuing shares. The full amount of the authorized capital must be paid in a month from the moment of official registration.