Equity capital, also known as share capital, refers to the funds that a company raises by issuing shares to its shareholders. This amount is determined by the Memorandum of Association and Articles of Association of the Company, and represents the maximum amount the company can raise through the sale of shares. It is important to note that share premium, which is the excess amount paid by investors for shares, is not included in the definition of authorized capital. This distinction is crucial in understanding the financial structure of a company and its potential for growth.
