Social capital
Social capital is the sum of the values that shareholders or partners contribute and make available to a company for its operation. The amount of the capital stock includes the values that the partners contributed initially in the constitution of the company, as well as the later additions or decreases that have been made by contributors.
The values contributed by the shareholders and that make up the social capitalThey can be in money or in goods. If the contribution is made in goods, these must be duly valued in advance and their value must be approved and agreed upon by the shareholders.
The capital contribution gives its partners Rights Y can on the company according to the participation that each one has.
The social capital must be reflected in the Statement of Financial Position duly classified according to whether in money or in goods.
The capital stock is divided into fractions called shares, quotas or parts that are determined in the statutes of incorporation of the company. The shareholders will have rights over the company proportional to the number of these parts or shares it owns.
According to the state in which these shares, quotas or parts are found, they are named as follows:
- Authorized capital: corresponds to the value necessary for the fulfillment of the company's object and that is stipulated according to its constitution statutes.
- Subscribed capital: corresponds to the part of the authorized capital that the partners have already agreed to pay, implying responsibility of the partners before the company.
- Paid-in capital: corresponds to the part of the subscribed capital that is actually paid by the shareholders to the company.
The Fashions Spots Society was incorporated on April 1 and according to its bylaws its capital is made up of 250,000 shares at a price of $ 2 each. The partner A pledged to acquire 50,000 shares, the partner B will acquire 75,000 shares and the partner C 25,000 shares. Before the end of the month, partners A and C made the payment corresponding to their subscribed shares.
It is required to reflect how the capital stock of Fashions Spots is constituted as of April 30:
| Type of capital | Number of actions | Capital value |
| Authorized capital | 250,000 | $ 500,000 |
| Subscribed capital | 150,000 | $ 300,000 |
| Paid-in capital | 75,000 | $ 150,000 |
- The subscribed capital corresponds to the shares that partners A B and C agreed to acquire = 50,000 + 75,000 + 25,000 = 150,000 shares.
- The paid-in capital corresponds to the shares that are actually paid by partners A and C = 50,000 + 25,000 = 75,000.
- In the following period, the company Fashions Spots decides to increase its share capital, for which it issues 50,000 shares.
The partner D acquires and pays 100,000 shares. It is required to reflect the new composition of social capital:
| Type of capital | Number of actions | Capital value |
| Authorized capital | 300,000 | $ 600,000 |
| Subscribed capital | 250,000 | $ 500,000 |
| Paid-in capital | 175,000 | $ 350,000 |
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