Watered share

Watered share – this is a share of a local corporate body, which total worth is less than its invested capital. For example, all the shares of an empty company, established with a raising capital only of 100 Dollars could be late transferred for a thousand Dollars (for example). But it still does not changes the fact that the raising capital is 100 Dollars only. And so this is an empty company which could not repay its debts or satisfy creditors in eventual liquidation. Therefore in many jurisdictions, the companies which pursue good reputation, hold huge amount of raising capital.
See also “Limited company”Watered share / Legal Glossary

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