A method of distributing previously unissued shares in a limited company in exchange for a contribution of capital.
Capital contribution refers to the cash or property acquired by a corporation from a shareholder without the receipt of additional stock. This amount is added to the basis of the shareholder's existing stock, and the corporation's basis is carried over from the shareholder.
Paid-In Capital Surplus represents capital received from investors in exchange for stock. It is distinguished from capital generated from earnings or donations and includes capital stock and contributions from stockholders that are credited to accounts other than capital stock, such as an excess over par value.
