Stockholders' deficit
From Wikipedia, the free encyclopedia
Accounting equation defines what stockholders' equity is:
Assets = Liabilities + Equity
Equity = Assets - Liabilities
When Assets > Liabilities you have a positive Equity or stockholders' equity. When it is not you have a negative stockholders' equity also rarely called stockholders' deficit.
Stockholders' deficit does not entail that stockholders owe money. It just means that the value of the assets of the company will have to rise above its liabilities before the stockholders will reap any value (above zero) from owning the company's stock.
