What are partly paid shares?
What are partly paid shares? Find a clear answer in this FAQ by 021 Trade.
Partly paid shares are shares of a company for which the shareholder has paid only a portion of the total issue price at the time of purchase. The remaining amount is payable later when the company makes calls as per the schedule specified in the issue terms. This arrangement allows shareholders to pay the full value of the shares over time rather than upfront.
Such a structure benefits investors who may not have the complete funds initially but still wish to participate in the company’s growth. It also benefits companies that may not require the entire capital immediately and can call for the remaining amount when needed.
Shareholders holding partly paid shares are entitled to certain rights, such as dividends and voting rights, usually in proportion to the amount paid on the shares. However, they remain liable to pay the outstanding amount whenever the company makes a call. If the shareholder fails to pay the required amount within the specified time, the company may forfeit the shares, and the amount already paid may also be forfeited as per the company’s rules and applicable regulations.
