Legal Capital
Legal capital is a jurisdiction-specific statutory capital amount used in tests for dividends, repurchases, reductions, and creditor protection.
Par-value and no-par shares use different statutory capital mechanics, while ordinary share capital identifies the relevant residual-equity class or legal definition.
Par value, stated capital, and legal capital are corporate-law and accounting inputs rather than valuation measures. The right term depends on whether the reader needs a per-share charter amount, a statutory capital balance, a no-par allocation, or capital associated with ordinary shares.
| Term | Main question |
|---|---|
| Par Value Stock | Does each share carry a stated nominal amount? |
| No-Par Stock | How is consideration allocated when no per-share par value exists? |
| Legal Capital | What statutory capital or surplus rule constrains a corporate action? |
| Ordinary Share Capital | Which issued capital belongs to the ordinary or legally defined residual class? |
Use the certificate or articles for par and class terms, board resolutions for consideration and stated-capital allocations, the stock ledger for issued shares, and financial statements for capital-account presentation. For dividend or reduction analysis, add the governing statute, current net-assets calculation, retained earnings, contractual restrictions, and any required approvals.
No-par status does not remove corporate-law requirements, and par value does not establish fair value. Analyze the exact transaction rather than inferring economic quality from the label.
This section is educational and does not provide legal, securities, tax, accounting, corporate-secretarial, transaction, or investment advice.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
Legal capital is a jurisdiction-specific statutory capital amount used in tests for dividends, repurchases, reductions, and creditor protection.
No-par stock has no per-share par value, but its issuance still requires valid consideration and can create stated capital under corporate law.
Ordinary share capital is issued capital associated with ordinary shares, but statutory definitions can include classes not labeled ordinary.
Par value stock has a nominal amount assigned to each share for corporate-law and capital-account purposes, not as a measure of market value.