Glossary

Capital stock

Total number of shares authorized by the charter of a stock corporation.

In Germany, the nominal or stated value of a corporation's capital stock must be at least €50,000. It is divided into par shares or no-par shares. If the company undertakes an ordinary or simple capital write-down, the value of the capital stock can temporarily drop below this minimum level. However, a capital write-down with this consequence will be approved only if the company plans to meet the minimum requirement through a subsequent capital increase.

The increase or reduction of a corporation's capital stock is subject to approval by the annual general meeting. Regulations on the minimum capital stock requirement are contained in the German Stock Corporation Act, sections 7 and 228.

Synonyms: subscribed capital

Our glossary explains important financial terms and should not leave any questions unanswered. However, if you are missing a definition, please write to us at redaktion@deutsche-boerse.com. We will then include the term if possible.