The creation of any commercial enterprise implies the presence of seed capital for its further functioning. In the modern economic space, a prerequisite for financial independence is a clear control over cash flows, regardless of their speed. The authorized capital is characterized by reduced mobility and rare movements, but the profitability of each company depends on the correctness of its accounting and use.
Authorized (stock) fund
From a legal and economic perspective, registered capital provides three important functions:
- Warranty The aggregate indicator of the size of the authorized capital serves as security for part of the obligations to creditors.
- Structural. The number and size of participation of each owner (founder) in the authorized capital determines the amount of his income and the degree of participation in decision-making of a managerial nature.
- Starting. Assurance at the initial stage of the formation of the company.
By definition, the authorized capital is the amount of assets that the owner (founders) invests in a future company. Depending on the registered legal form, the capabilities of the owners and the scope of the organization, a method of creating a stock fund is chosen. As a contribution, the founder can make:
- Cash (cash, non-cash, currency) funds.
- Non-current (production, non-production) assets.
- Intangible assets (having estimated value).
- Securities.
- Current assets.
With any option for creating entries in the authorized capital should reflect the amount of each contribution and the procedure for its use for the needs of the enterprise.
Accounting
Account 80 “Authorized capital” was created to reflect all movement operations and the formation of the funds of the company's stock fund. The account is passive, balance, its total equivalent denotes the actual amount of capital, it is regulated by the legislation of the Russian Federation and the charter documents of the organization. Postings on the authorized capital are formed at its creation and at the time of changing its size in the direction of increase or decrease. Any adjustment to the amount indicated in the balance sheet of the enterprise should be agreed with all owners and included in the constituent documents. Analytics is conducted for each owner separately. The accounting transaction is recorded as the first posting on the authorized capital: Debit 75; Credit 80.
Opportunities for increasing fund size
With an increase in the company's stock (authorized) fund, owners can use various assets. Depending on the funds used, a contribution to the authorized capital is drawn up. Postings are composed as follows:
1. Debit 52, 51, 50, 55; Credit 80. Increase of funds of the authorized capital in cash credited to the settlement, special, foreign currency account of the enterprise.
2. Debit 41, 10, 11; Credit 80. Current assets (materials, goods, raw materials) contributed by the owners to the stock fund.
It is also possible to replenish the authorized capital with property, the transactions are as follows:
1. Debit 01; Credit 80. Fixed assets were contributed to the authorized capital.
2. Debit 04; Credit 80. Intangible assets accepted as a contribution to the authorized capital.
The change in the direction of increasing the amount of capital of the enterprise can be made with the consent of all owners at the expense of the proceeds, which are not distributed among the founders, but are sent to the authorized (stock) fund of the company: Dt 84; CT 80. In the same way, an increase can occur from additional capital assets or reserve funds, which is reflected in the relevant transactions and changes in the constituent (charter) documents of the enterprise.
Fund reduction
Reducing the established amount of working capital is possible only with the participation of all owners. The motivation for this step may be the financial and economic situation of the company. But most often, the decrease occurs as a result of the voluntary withdrawal from the approved composition of the founders of several or one owner. Moreover, the total expression of the authorized capital does not always decrease; the share of funds contributed by the former owners can be redeemed by the existing ones. Postings to the authorized capital, in case of its reduction, are as follows:
- Dt 80; Kt 01, 04. Return of fixed assets, intangible assets accepted as a contribution to the authorized capital.
- Dt 80; Kt 10, 41, 11. Return of materials, goods to the owner who has left the founders of the enterprise.
Upon payment of cash or non-cash funds, a refund may occur from the cash desk of the enterprise or settlement, currency accounts: Dt 80; Kt 50, 55, 51, 52. In order to avoid the negative consequences of the withdrawal of the working assets of the enterprise (current, non-current, material), owners can agree on the return of the contributed part of the authorized capital in cash (cash, non-cash). For this, an assessment of the assets received is carried out, the residual value is calculated.
Change Reflection
For any movement of funds in the authorized capital, a documentary confirmation is a prerequisite. It includes the
minutes of the meeting of all founders (owners), signed and certified by its participants. Based on it, changes are made to the constituent documents. This procedure takes a long period of time, requires the adjustment of registration records, so movements on account 80 "authorized capital" are rare.