The conditions for capitalization first require transformable resources or assets. These resources or assets can be material, such as land, buildings, machines, etc., or they can be non-material, such as patents, brands, intellectual property rights, etc. Secondly, these resources or assets need to have a certain value and market demand in order to be reasonably priced and circulated in the capital market.
In addition, capitalization also requires certain capital market and investor participation. Only when there are enough investors willing to invest in purchasing these assets or resources and hold them for a period of time before selling them can effective capital market transactions be formed. The motivation for investors to invest in purchasing assets or resources is mainly for the purpose of obtaining capital appreciation.
Capitalization requires certain legal and institutional guarantees. In the process of capital transactions, relevant laws and regulatory agencies need to formulate corresponding rules and regulations to ensure the fairness, transparency and stability of the capital market. At the same time, sound laws and systems can also protect the rights and interests of investors and the legitimacy of assets, and prevent investors from suffering undue losses in transactions.