Share Capital
Also called: Paid-up Capital, Issued Capital
Money shareholders paid for their shares at face value, usually Rs 100 each, as registered with the Company Registrar. On the Balance Sheet.
In detail
Share Capital is the money shareholders paid for their shares at face value, Rs 100 a share in most Nepali companies. It is recorded once at incorporation and again whenever new shares are issued, and it never moves with profit or loss. The amount must agree with the paid-up capital filed with the Office of the Company Registrar, and the Shareholder and Share Transfer documents under Invoicing keep the register of who holds how many shares. Money the owner puts in without shares being allotted is a loan to the company and belongs in Payable to Related Parties. Owner drawings do not reduce Share Capital either; they are a loan from the company or a dividend out of Retained Earnings.
Formula
Share Capital = Number of shares issued x Face value per share
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Bank Account | Rs 25,00,000 | |
| Share Capital | Rs 25,00,000 |
How to record it in BRAccount
- 01Go to Invoicing > Shareholder > New and record each shareholder with their folio.
- 02Go to Invoicing > Journal Entry > New dated the day the share money reaches the bank.
- 03Debit the bank account and credit Share Capital with the face value received.
- 04Attach the bank deposit slip and the share allotment resolution.
- 05Submit. The entry below posts and Equity on the Balance Sheet rises.
- 06Keep the figure equal to the paid-up capital on the company registration certificate.
When to use it
Post by Journal Entry or Payment Entry when shares are issued or more capital is brought in. Changes need a Registrar filing.
Example from the demo books
Opening: Dr Bank Account Rs 25,00,000, Cr Share Capital Rs 25,00,000 for 25,000 shares of Rs 100 each in Yatra For Fun Pvt Ltd.