Difference between Net worth and share capital


3 Answer(s)


Promoters investment in the company (share capital) is only 1 component of shareholder equity. There are other components to shareholder equity such as Retained Earnings etc

Promoters invest money in the company during the early stages to fund the company's operations. After a few years promoters and other external investors can invest more cash as share capital.

networth is an asset and share capital is a liability to the company