Definition of social capital - What it is, Meaning and Concept

The concept of social capital can be analyzed from two perspectives: accounting and sociology .As an accounting term, social capital is the value of the assets or money that the partners contribute to a company without the right of return.

In this way, the share capital (which is recorded in an accounting item) grants to the partners different rights according to their participation and represents a guarantee against third parties.This is a stable figure, although the negative results can lead to bankruptcy and then the company You will already have the necessary resources to meet your obligations with third parties.

It is important to establish in this sense that there is also what is known as minimum social capital.This term with which it comes to be defined to that capital that every company must keep as a minimum.It is important to underline that this will be or another depending on the type of company that is, in this way a corporation must have a minimum capital stock much higher than that of a limited liability company.

In another sense, the share capital is a liability (debt) of the company against the partners.To modify this contribution, a series of legal procedures must be followed It is possible to distinguish between the notions of social capital, social equity (all assets and liabilities of the company) and equity (the effective difference between assets and liabilities ).

In addition to all of the above, we have to take into account that within a company, what is the extension of social capital can take place.This is achieved through different actions or situations such as, for example, monetary contributions, non-monetary contributions, for transformation of benefits or reserves as well as for compensation of credits against society.

In the same way, it is also possible that a specific company suffers the reduction of its share capital.In this case, the circumstances that may lead to that fact are the returns of contributions, the increase of the legal reserve, the remission of passive dividends or with the clear objective of eliminating losses.

The last mentioned event is decided to be carried out with the intention of recovering the balance between capital and net worth.Hence, that loss compensation can be achieved well by reducing the accounting dimension of the company or through the benefits of the company.

For sociology, social capital is what enables cooperation between two parties .The notion does not necessarily imply something positive, since contacts between people can lead to negative events (such as mafia societies, for example).

In other words, social capital implies the sociability of a human group, with the aspects that allow collaboration and its use.Sociologists emphasize that social capital is formed by social networks, mutual trust and effective norms, three concepts that are not easy to define and that can vary according to the analyst's conception.