Authorized share capital – This legal term finds application in the Corporate Law. It refers mainly to starting capital declared for establishing the company. For example, sometimes local corporate bodies can set up in their Memorandum of Association (the Establishing Act) the maximum amount of capital that company can use. This sum of money, usually deposited in a bank in the name of the company, will be the authorized share capital.
The capital of the company usually reflects the recent financial standing of the company. And convinces the prospective partners of the company in its stable status.