Capital Stock in United States

Capital Stock Definition

The sum, divided into shares, which is raised by mutual subscription of the members of a corporation. It is said to be the sum upon which calls may be made upon the stockholders, and dividends are to be paid. 1 Sandf. Ch. (N. Y.) 280; Walford, Rys. 252; 4 Zab. (N. J.) 195; Angell & A. Corp. §§ 151, 556. “The sums due by virtue of the subscriptions or collected from the subscribers, and invested for the benefit of the corporation.” 30 Conn. 290. It is never used to indicate the value of the property of the corporation. 3 Zab. (N. J.) 195. The phrase is used as synonymous with “Capital.” 23 N. Y. 222. It is to be distinguished from “stock,” which is the shareholder’s individual interest in the capital stock. 9 Yerg. (Tenn.) 490. his definition of Capital Stock is based on The Cyclopedic Law Dictionary. ThisCapital Stock in the Dictionaries

Over-the-Counter Stocks

“Over-the-Counter” stocks are company shares not listed on any exchange and, hence, traded only “over-the-counter.” In fact, in the U.S., the big OTC stocks are generally traded on the National Association of Securities Dealers Automated Quotations System (NASDAQ). Quotes for these shares are available in the NASDAQ Stock Quotesdatabase. For quotes on smaller OTC stocks, try the OTC Markets (including the former Pink Sheets) and/or the OTC Bulletin Board. If that doesn’t work, brokers call dealers to find current prices.

Margin Rules: In the past, the Federal Reserve Board’s margin rules said that a stock was was “marginable at brokers and dealers” (i.e., you could borrow the money to buy the stock from the broker or dealer who was selling you the stock) only if the stock was (a) traded on an exchange or (b) on a list compiled by the FRB. An amendment to Regulation T said the OTC stocks would now be marginable (and therefore subject to the FRB’s margin rules) as of January 1, 1999 if and only if it trade on the NSADAQ. To get historical lists of OTC stocks that were marginable (and hence subject to the Federal Reserve Board’s margin rules) before 1999, search back issues of the Federal Register. The lists were published quarterly by the FRB until November 1998 (the last list was effective through December 1998).

See Also

• Federal Reserve System
• NASDAQ
• Stock Exchange Rules
• Stock Prices
• Stock Swaps

Subscriptions to Capital Stock and Corporate Law

This section provides basic coverage of Subscriptions to Capital Stock in relation to U.S. state and federal corporate law. For comprehensive coverage, please visit the main entry.

Resources

See Also

• Corporate Law