Capital can be defined as a fund or money which a person use to start a business. It can also be defined as total amount of money for running a business, is a resources used to increase wealth.
Types of capital.
1. Nominal/registered capital :- nominal or registered capital is the total amount of capital which a company or organization is authorised to issue out to the public.
2. Issued capital :- this is similar to nominal capital,it is the shares given out to the public out of the nominal capital at a particular period of time.
3. Called up capital :- this is part of the issued capital which is expected of the shareholders to pay for.
4. Paid up capital :- this is part of called up capital which the shareholders have actually paid for.
5. Uncalled capital :- this is the part of of issued capital yet to be called up for payment.
6. Capital employed :- this is the total amount of money used in a business. Also called total asset of a business.
7. Capital owned :- this is the total money of a business. In a nutshell capital employed is the net worth of a business.
8. Fixed capital :- this is the durable capital of an enterprises which is used continuously for further production. Fixed capital is always used as a means of production.
9. Loan capital :- this is the total amount of money a business borrow from external source to run a business.
10. Liquid capital :- this is asset that can be easily converted to money.
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