It is important to note that the balance sheet relates to the business, not to the shareholders. Any share capital is therefore a liability of the business because it is owed to the shareholders. Any net profit earned is also the property of the shareholders. This is paid to them either as a dividend or reinvested in the business on their behalf in which it is called a 'reserve'. A balance sheet should always balance, that is to say, assets should equal liabilities because these two aspects are looking at the same thing but from two different perspective - what the company owns and what it owes.