Share capital (also known as ‘statement of capital’)
This is the total value of shares, issued or non-issued. For example, if you decide to issue one hundred ordinary shares with a value of £1 each, then the share capital would be £100. You would likely want to price your shares relative to the current net worth of your business – factoring in your profits and growth rate with how much return your investors are likely to see (and by when).
This is the creation and issuing of new shares, by a company or its directors. You could think of it as an event where instead of a product, a company will announce and distribute a new amount of available shares for sale.
Memorandum and articles of association
According to Inform Direct, The memorandum of association is the document that sets up the company and the articles of association set out how the company is run, governed and owned. These documents are a crucial collection for any company, as they provide guidance on how the company should be run and how disputes should be resolved. They are often used in legal disputes or transactions, such as mergers or acquisitions, to determine the rights and obligations of the company and its stakeholders.
Articles of incorporation
This document provides a legal framework for its operation and governance. They are often used by investors, lenders, and other stakeholders to assess the business’s structure and governance practices.
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