An enterprise's share capital consists of its own financial resources. Total capital consists of both share capital and debt. You must have equity capital to finance your business. In operational accounting, equity is the opposite of debt. Limited Liability Companies are required to make a capital deposit at the time of formation, also known as a share deposit or share capital. This deposit and any subsequent capital increase constitute the subscribed capital. A company's net profit for the year is its profit after deducting all taxes. The inverse is the annual loss. An asset coverage ratio compares the share capital to the fixed capital of the company. Fixed assets include, for instance, machines, office equipment, and licenses.

Equity capital is the excess funds, or equity, that an investor has on-hand to use for investments. The more equity one has, the more money they can invest in stocks and bonds. With this additional cash, they are able to take on riskier positions that pay more dividends or interest than others.

The term equity capital refers to a type of financing strategy that uses the ownership interest of a company’s stockholders as collateral. Equity capital helps growth-oriented companies expand their reach and give potential investors more perks, such as voting rights or dividends.