Authorized Capital

Also found in: Dictionary, Thesaurus, Financial.
Related to Authorized Capital: authorized capital stock, Issued capital

Authorized Capital


the amount of capital specified in the charter or other agreement governing the establishment of capitalist enterprises, joint-stock companies, and various business associations as necessary to start up operations. The capital is raised through government appropriations, stock sales, and individual contributions (the last being extremely rare today). Authorized stock is also referred to as basic capital and share capital. In some countries (France, Federal Republic of Germany), enterprises and associations can be registered only if the amount of authorized capital conforms to certain legal requirements. In the USA and Great Britain, there are no such requirements.

The amount of authorized capital is much less than the amount of capital obtained through credits, investments, and bonds. Together with reserve capital, authorized capital constitutes the assets of an enterprise. Since the ratio of the authorized capital to the overall volume of economic activity is used in evaluating financial soundness, current high rates of inflation have led capitalist enterprises and banks to regularly increase the authorized capital by placing additional stock on the market.


References in periodicals archive ?
After the SEC approves the amendments to deny pre-emptive rights for issuances of common shares and reduce the par value of common shares, and the company's authorized capital stock is increased, it can and will have enough common shares to issue to SMC for the share swap transaction, as well as conduct a subsequent follow-on share offering to comply with the minimum public ownership requirement of the exchange,' the disclosure said.
PNB, before getting approval, had an authorized capital stock of P50 billion comprising 1.
The source says that for the moment the actual authorized capital of the Bank is 16.
Early this week, SMPC said it has secured approval from the Securities and Exchange Commission (SEC) to raise its authorized capital stock to P10 billion from P3 billion.
The press service of the Development Bank of the Republic of Belarus has announced that the Bank has increased its authorized capital to Br8.
The authorized capital grew by 0,2% up to 243 bln drams or $602.
During the month, 98 companies increased their authorized capital with the aggregate authorized capital increment of Rs 4.
34%-stake of Sky Finance in authorized capital of Kapriz Ltd23.
He also noted that the bank will continue increasing its authorized capital.
In a disclosure to the Philippine Stock Exchange on Friday, East West said its board had approved an increase in authorized capital stock to P50 billion, more than double the current authorized capital stock of P20 billion.
In the country, International Bank of Azerbaijan- a giant state-owned bank owns at least 40% of all bank assets in the country - will bring its authorized capital up to $1 billion.

Full browser ?