capitalization n1 : the act or process of capitalizing [ of earnings]
2 : a sum resulting from a process of capitalizing
: paid-in capital at capital [inadequate ]
3 : total capital liabilities of a business including both equity capital and debt capital NOTE: Equity capital is considered a liability because the investors may recall some or all of it (as by redeeming stock). Inadequate capitalization of a business is considered by courts in cases dealing with equitable subordination of creditors or piercing the corporate veil.
4 : the total par value or the stated value of no-par issues of authorized capital stock
Source: Merriam-Webster's Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.