Contributed capital is another name for paid-in capital: the total amount that shareholders have invested in a corporation by buying its shares directly from the company. It is one of the two main parts of stockholders' equity, the other being earned capital in the form of retained earnings.
How the term is used
Some balance sheets use "contributed capital" as the heading for the equity section that covers investment by owners, while others use "paid-in capital". Under either label the section usually shows the par or stated value of common stock and preferred stock issued, followed by additional paid-in capital, which is the amount received above par. If a company issues 10,000 shares of $1 par stock for $15 a share, it records $10,000 in the common stock account and $140,000 as additional paid-in capital, so contributed capital rises by $150,000.
The distinction matters because contributed capital comes from owners, while retained earnings come from profits kept in the business. Analysts look at the split to see how much of a company's equity was paid in and how much was generated by operations. Contributed capital does not change when the company earns income or pays dividends; it changes when shares are issued, and it is reduced by some treasury stock transactions or retirements of shares, depending on the method used.