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Simple English definitions for legal terms
paid-in capital
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A quick definition of paid-in capital:
Paid-in capital refers to the money that investors have paid for a company's stock. This money is used by the company to fund its operations and growth. It is different from debt capital, which is money raised by issuing bonds. Paid-in capital is also known as capital stock and is a type of equity capital, which means it represents ownership in the company.
A more thorough explanation:
Definition: Paid-in capital refers to the money that investors have paid for the capital stock of a corporation.
Examples: If a corporation issues 100 shares of stock at $10 per share, and investors buy all 100 shares, the paid-in capital would be $1,000.
Explanation: Paid-in capital is the amount of money that a corporation receives from investors in exchange for ownership in the company. This money is used to fund the operations of the business and help it grow. In the example given, the investors paid $10 per share, which means that the corporation received $1,000 in total. This money can be used to purchase assets, pay off debts, or invest in new projects.