Minimum capital is a concept used in
corporate law
Corporate law (also known as company law or enterprise law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corpora ...
and
banking regulation
Banking regulation and supervision refers to a form of financial regulation which subjects banks to certain requirements, restrictions and guidelines, enforced by a financial regulatory authority generally referred to as banking supervisor, with ...
to stipulate what assets the organisation must hold as a minimum requirement. The purpose of minimum capital in corporate law is to ensure that in the event of insolvency or financial instability, the corporation has a sufficient equity base to satisfy the claims of creditors. In banking and financial regulation it is normally referred to as the
capital requirement
A capital requirement (also known as regulatory capital, capital adequacy or capital base) is the amount of capital a bank or other financial institution has to have as required by its financial regulator. This is usually expressed as a capital ...
.
Corporate law
All
public companies within the
European Union
The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...
are required to hold at least €25,000 in capital, although many countries go above this minimum requirement. The requirement is e.g. £50,000 in the United Kingdoms (England and Wales), of which at least 25% must be paid up (of the nominal amount and of any premium).
Banking regulation
*
Basel II
*
Capital Requirements Directive
*
Leverage (finance)
See also
*
Banking regulation
Banking regulation and supervision refers to a form of financial regulation which subjects banks to certain requirements, restrictions and guidelines, enforced by a financial regulatory authority generally referred to as banking supervisor, with ...
*
Corporate law
Corporate law (also known as company law or enterprise law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corpora ...
*
UK insolvency law
References
External links
Capstone Capital Group
{{DEFAULTSORT:Minimum Capital
United Kingdom company law
Capital requirement