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While it's easy to find the definition of this online, can someone with practical experience please give me further explanation?
Here are my, probably super dummy questions, but hey, we're not all experts at everything
1. To my understanding, authorized capital represents limit for possibly issued capital. E.g. company can have authorized capital of $1000 - but $0 of issued capital, right?
2. To benefit from the 100% ownership of the company, in form of dividend, I need to possess 100% of issued capital - which may as well be 1 share worth $0.01, is this correct?
3. I guess I need to pay money for shares issued to me, so what happens with this money from companies perspective? Is it used by management as they see fit, or it has some special purpose?
NOTE: I'm well aware this calls for professional accountant advice (someone here once called me up on that), so this is just another source of information for me, and often people who practice things have some really valuable advice not found anywhere else.
Here are my, probably super dummy questions, but hey, we're not all experts at everything
1. To my understanding, authorized capital represents limit for possibly issued capital. E.g. company can have authorized capital of $1000 - but $0 of issued capital, right?
2. To benefit from the 100% ownership of the company, in form of dividend, I need to possess 100% of issued capital - which may as well be 1 share worth $0.01, is this correct?
3. I guess I need to pay money for shares issued to me, so what happens with this money from companies perspective? Is it used by management as they see fit, or it has some special purpose?
NOTE: I'm well aware this calls for professional accountant advice (someone here once called me up on that
), so this is just another source of information for me, and often people who practice things have some really valuable advice not found anywhere else.
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