Capital reserve

Capital reserve is the non-refundable amount paid into the company by the owners. This money does not increase the registered capital. This money is often called premium.

The capital reserve of the company includes the money that the owners put into the company without the burden of repayment, but it does not increase the registered capital. 

A classic form of this is when joint-stock companies -stock issue shares. When we issue shares, they have a nominal/face value. The nominal/face value of newly issued shares is usually the same as the nominal value of previously issued shares. However, buyers usually subscribe to the shares not at the nominal value, but at some higher are quoted at the exchange rate. The part of the price of the issued share that is equal to the nominal value is included in the subscribed capital. On the other hand, the part of the share price above the nominal value increases the capital reserve. This part is premium.

The capital reserve can decrease or increase compared to the subscribed capital, retained earnings reserve or against tied-up reserves. If the company's registered capital is increased from the capital reserve, the capital reserve decreases by the same amount as the registered capital increases. If the accumulated profit reserve or the tied-up reserves are increased from the capital reserve, the situation is similar. 

The capital reserve can increase if part of the tied-up reserves is released and returned to the capital reserve. The capital reserve also increases if the company reduces the registered capital in favor of the capital reserve.