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What type of share capital is called risk capital

Posted by Anmol Cheema 4 years ago

CBSE > Class 11 > Business Studies

1 answers

Yogita Ingle 4 years ago

Equity Share Capital is called as risk capital as equity shareholders have a claim over the residual proceeds of the company. In other words, in the event of winding up they are the last to be paid off after settling the claims of creditors and other external liabilities. In case the funds are insufficient to repay or settle external liabilities, equity shareholders are not paid off any thing instead the uncalled amount may be called up from the them.

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