Question

Legal capital is best defined as

a. the amount of capital the state of incorporation allows the company to accumulate
a corporate form of business organization, legal capital is best defined as
over its existence.
b. the par value of all capital stock issued.
c. the amount of capital the federal government allows a corporation to generate.
d. the total capital raised by a corporation within the limits set by the Securities and
Exchange Commission.

Answer 1

b. the par value of all capital stock issued.

Step-by-step explanation:

As per the business format, capital of a company is the value of share capital.

Now, also legal capital means the share capital issued as this reflects the legal share of individual investors in the company.

Authorized capital is the value of maximum capital that can be issued by the company in the form of equity shares.

Issued capital is that part of authorized capital that is actually issued.

And therefore, the par value that is the face value of shares issued, that is equity issued is the legal capital of the company.