Paid in capital (Paid-in capital or Contributed capital) refers to capital contributed to a corporation by investors through purchase of stock from the corporation (primary market) (not through purchase of stock in the open market from other stockholders (secondary market)). It includes share capital (i.e. capital stock) as well as additional paid-in capital.
The paid-in capital account does not reflect the amount of capital contributed by any specific investor. Instead, it shows the aggregate amount of capital contributed by all investors.
However, the term has different definitions in different contexts. For example, it could refer to the money that a company gets from potential investors in addition to the stated (nominal or par) value of the stock, which coincides with the definition of Additional paid-in capital (Paid-in capital in excess of par). The user should be aware of the use of the term and abbreviation, otherwise it may be misleading.
Read more about Paid In Capital: Basic Concepts, Additional Paid-in Capital, See Also
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