Simple English definitions for legal terms
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Capital surplus is the extra money a company has after it has paid all its debts and expenses. It can come from things like selling stock for more than it's worth or getting donations. This money is different from the money the company has earned from its business. It's like having extra money in your piggy bank after you've paid for everything you need. The company can use this extra money for things like buying new equipment or expanding its business.
Definition: Capital surplus is the excess of a corporation's net worth beyond the par value of its capital stock. It is a type of surplus that is not earned from the accumulation of profits, but rather created by financial reorganization or gifts.
Examples:
These examples illustrate how capital surplus is different from earned surplus, which is the surplus gained from a company's profits. Capital surplus is created through financial transactions or gifts, and can be used for various purposes such as investments or paying off debt.