NOMINAL CAPITAL Meaning and
Definition
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Nominal capital refers to the stated or face value of the authorized share capital of a company, which is the maximum amount of capital that a company can legally issue to its shareholders. It is also known as the registered capital or nominal value of a company's shares.
The nominal capital is determined at the time of incorporation or at a subsequent restructuring of the company. It is typically mentioned in the company's constitutional documents, such as the Memorandum of Association, and represents the initial capital investment required to start the company's operations.
The nominal capital does not necessarily reflect the actual or market value of the company. It serves as a reference point for determining the authorized share capital and the rights and obligations associated with the ownership of shares. The nominal capital also acts as a basis for calculating membership fees, asset valuation, and distribution of profits.
It should be noted that the nominal capital can be higher or lower than the market value of a company, as it is often adjusted over time as per the company's financial position, capital needs, and business requirements. In some cases, companies may also issue shares at a premium or discount to the nominal capital.
Overall, nominal capital represents the legal base of a company's share capital and plays a crucial role in determining its financial structure, ownership rights, and overall operations.
Common Misspellings for NOMINAL CAPITAL
- bominal capital
- mominal capital
- jominal capital
- hominal capital
- niminal capital
- nkminal capital
- nlminal capital
- npminal capital
- n0minal capital
- n9minal capital
- noninal capital
- nokinal capital
- nojinal capital
- nomunal capital
- nomjnal capital
- nomknal capital
- nomonal capital
- nom9nal capital
- nom8nal capital
- nomibal capital
Etymology of NOMINAL CAPITAL
The word "nominal" derives from the Latin word "nominālis", which means "pertaining to a name". It was derived from the Latin word "nomen", meaning "name".
The word "capital" originates from the Latin word "capitālis", meaning "of the head" or "related to the head". It originally referred to the head of livestock as a measure of wealth.
When combined, "nominal capital" refers to the face value or the initial amount of money with which a company or business is established. The term "nominal" indicates that the capital is merely in name or in theory, rather than being the actual amount of money invested in the business.
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