Social Capital

Social Capital : What Is It And How To Formalize It?

Social Capital

Social Capital? For a company to exist, certain values ​​must be made available to meet certain requirements, such as registering the CNPJ and the social contract, purchasing furniture, renting the office and paying the salaries of the first employees and members, in addition to normal routine expenses business, as an advertising investment and in spreading the new brand – after all, the market needs to know that your company exists.

All of this initial investment for the company to be incorporated is called social capital, which consists of all the resources available to the company by the owners or third parties, that is, the sum of the resources or accumulated wealth that are destined to the production of new riches. In this scenario, equity is understood as a set of capital and its origin is represented by liabilities and their application by assets.

You’ve probably heard of this term, but a lot of people (and even business owners) have a hard time knowing its correct definition.

To facilitate the understanding of what is social capital, how we define value and how formalization occurs in the social contract, we list below the details of each stage. Check out!

Social CapitalWhat is social capital?

From the initial planning of the activities in the business plan, we must contemplate the investment necessary for the operations of the company. This amount normally includes operating costs up to billing, called the cash flow start. For the importance of this number, we must not underestimate this stage! It is important to think about key issues such as raw materials, payments from suppliers and employees.

Social capital is the amount needed to start activities and start a business while the business does not produce resources to sustain itself. Thus, it corresponds to the initial equity and is the investment made by its owners. Capital, also called paid-in capital or nominal capital, changes when owners divest, or decrease capital, and additional investments, or capital increases.

For corporations, social capital must be informed at the time of the creation of the social contract and divided into quotas among the members, if there are more people in the company formation or need.

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Social CapitalHow to define the value of social capital?

The availability of financial resources used to compose the social capital of a company has the function of delimiting the investment of each partner, determining the participation of each executive in the new organization. With the value of the capital of the company it is possible to carry out the distribution of quotas and the percentage of right of ownership and dominion of the company. In this way, disputes, disassociations and societal changes, for example, can be avoided.

This value of social capital needs to be defined from a business plan designed by those involved. With this definition, the partners must establish the portion of it that each one will subscribe, that is, stipulate in the social contract the percentage of the capital stock that is the responsibility of each owner. The next step is its payment, which consists of the entry of the share of each partner, which may occur in currency or goods, such as real estate and automobiles.

In the course of the existence of a company, there may be increases or decreases in the value of the capital stock. The increases can be formalized when there is a need to inject more money into the company and the decreases can occur when there are irreparable losses or the capital is higher than the company’s activities. In both situations, the new contract must be registered with the Board of Trade.

Social CapitalThe formalization of social capital

Knowing the operations and obligations of your company is the first step in correctly defining the value of social capital. Our tip for anyone who is in this step is to invest time, analyze the market with care and have dedication in the planning of your company – these will be the factors to try to ensure the success of your business.

Based on this planning, it is necessary to formalize the value of the share capital in writing, in the social contract, as well as the amount and nature of the amount invested by each partner, regardless of whether it was in cash or in the form of material assets.

And so, you still have doubts about the definition of social capital? Have you formalized this aspect of your company? Leave your comment here on the blog and tell us!

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