Paid in capital

Paid-in capital is the money that a company gets from people who invest in the company by buying stocks. Imagine you have a lemonade stand and you want to make it better by opening a bigger stand with more lemons and cups. You ask your friends and family to help you by giving you money to start this bigger lemonade stand. This money they give you is like paid-in capital.

When a company wants to make their business bigger, they might need more money than they have, so they ask people to invest in their company. This is called issuing stocks. When people buy stocks, they become part owners of the company, and they help the company grow by giving it money. The money the company gets from people buying its stocks is the company's paid-in capital.

So, the more paid-in capital a company has, the more it can use to grow its business, by hiring more workers, buying new equipment, or expanding to new locations. It's like when you have more money to spend at your lemonade stand, you can buy more supplies and make more lemonade to sell.