Share Capital
Share Capital
Share capital is a product that lets the members have equity of ownership of a SACCO and members earn dividends on the same annually.
In Kenya Bankers Sacco, all members are required to own KES. 1500 shares of KES. 20 each a minimum share capital of KES. 30,000
Share capital amount is not withdrawable but can be transferred or sold to an existing member in case the previous holder of such amount is exiting the SACCO
Importance of shareholders in business.
Shareholders are the owners of companies. A small business may have just one shareholder, the founder, while a public company may have thousands of individuals. Shareholders are important to a business. They are a major source of capital and their money is what is used to start a business and help it to continue its operations.
Below are some of the importance shareholders bring to a company:
One of the primary reasons for going public is to raise funds from investors. In return, the company’s founders give up part ownership to these new investors.
Shareholders play both direct and indirect roles in a company’s operations. They elect directors who appoint and supervise senior officers, including the chief executive officer.
Shareholders usually determine who controls a public company. Institutional shareholders may publicly call on company management to consider strategic options, such as selling off the company or merging with another company.
Dividends are periodic payments that some companies give to shareholders based on company profits. However, not all companies pay dividends. Many choose to reinvest all profits back into their operations rather than distribute earnings.
The primary reason most investors buy stock is that shares of stock have the potential to appreciate over time. When you are shareholder you can offer your shares of stock for sale at any time.
Features of Share Capital:
Share capital is owned capital of the company. It is actually the money of the shareholders and since the shareholders are the owner of the company, so share capital is the owned capital.
It remains with the company till its liquidation. including the chief executive officer.
Share capital is the most dependable source of finance for joint-stock companies.
It raised the creditworthiness of the company.
It provides substantial funds to the company.
Share capital is easily available for expansion and diversification of business activities.
The amount of share capital can be raised by amending the capital clause of the Memorandum of Association.
Share capital does not create any charge on the assets of the company.
Share capital allow its shareholders to participate in the company’s management with the normal rights of shareholders.
It gives shareholders the benefit of bonus shares.
Share capital also gives its shareholders the befit of limited liability as the liability of its shareholders is limited up to the face value of each share.