Capital Stock Legal Meaning and Definition

Here is a simplified definition of the legal term Capital Stock.

Capital Stock (noun):

Capital Stock refers to the total amount of money initially paid or invested into a company by its shareholders when they first purchase their shares. It is the combined value of all shares directly issued to shareholders during a share issue offer. Although Capital Stock is an important value, it does not indicate the current market worth of these shares, nor does it include potential profit or reserves held by the company that belong to shareholders.