How does a company raise its capital?

1.	How does a company raise its capital?
Answer» Divison of capital in small fractions: If for a public company, the capital to start the company is raised from the public in the form of shares. The company asks the public to apply for purchasing shares of the company or in simple words ‘purchasing a share’ in the company. People buy company’s shares from stock market and become shareholders. The company than starts its business with the share capital i.e. fund raised by selling the shares. In case of a private limited company, fund is raised by members or borrowed from banks and other sources.

Answer»

Divison of capital in small fractions:

If for a public company, the capital to start the company is raised from the public in the form of shares.
The company asks the public to apply for purchasing shares of the company or in simple words ‘purchasing a share’ in the company.
People buy company’s shares from stock market and become shareholders. The company than starts its business with the share capital i.e. fund raised by selling the shares.
In case of a private limited company, fund is raised by members or borrowed from banks and other sources.

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