Capital is treated as liability because of

Solution(By Examveda Team)

The Separate Entity Principle is a fundamental principle of Company Law applied on a global basis. Pursuant to this principle, a company is treated as a distinct entity from its members. The separate entity rule pervades company law and has had wide reaching implications on theoretical and practical company law.
Now as we know that Owners (Members/Promoters/Founders/Shareholders/Sponsors) are different legal entities in compare to the Company, Hence when they start or fund the company via investing in it, that Amount becomes the liability for company (As Company is different Legal Entity) in-order to pay them back in form of profit reruns (dividend/interest/share price increase due to good performance. So capital a liability.