Capital paid in excess of par value refers to the amount of money shareholders have invested in a company that exceeds the par value of the issued shares. This extra amount is often reflected on the equity section of the balance sheet and signifies additional capital that the company can use for growth and operations.
Capital reduction, also known as the reduction of capital, is a restructuring process whereby a company reduces its shareholder equity through activities such as repurchasing shares or decreasing share capital to distribute assets to shareholders or to eliminate losses.
Preferred stocks or bonds convertible into common stock, or warrants to purchase common stock at a specified price or discount from market price. Common stock equivalents represent potential dilution of existing common shareholder equity.
Contribution to capital refers to the funds or assets provided by shareholders or owners to a company, which increases the company's equity but does not constitute income for tax purposes.
A disproportionate distribution occurs when some shareholders receive cash or other property while others see an increase in their proportionate interests in the assets or earnings and profits of the corporation. This typically leads to an unequal allocation of the corporation's resources among its shareholders.
A partly paid share in a company that the shareholder must forfeit due to failure to pay a subsequent or final payment. Such shares must either be sold or canceled by a public company, whereas a private company is not regulated in this respect.
Paid-up share capital refers to the proportion of issued share capital of a company that has been fully paid for by its shareholders, meaning the company has received the full payment for the shares.
Watered stock refers to shares of a company that are issued at a price much higher than their intrinsic value.
