What does fully paid ordinary shares mean?
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A fully paid share means the purchaser has paid the total issue price of the share. For example, shares may be issued for $1 each, and a shareholder may purchase those shares for $1 each. The shareholder has no further obligation to pay money on that share.
Partly paid shares are issued by a company when the shareholder who holds those shares has not paid the full issue price of those shares. For example, a company issues its shares at $1.00 per share. Angela pays $5.00 in total for 5 shares. The company issues Angela with 5 ‘fully paid’ shares.
What is the meaning of fully paid up?
Paid-up capital represents money that is not borrowed. A company that is fully paid-up has sold all available shares and thus cannot increase its capital unless it borrows money by taking on debt. A company could, however, receive authorization to sell more shares.
What are ordinary shares examples?
An ordinary share is a form of corporate equity ownership, i.e., a type of company share. For example, if XYZ PLC issued 10,000 shares and you own 500 ordinary shares, you own 5\% of the company. Every PLC must have ordinary shares as part of its stock. PLC stands for Public Limited Company.
Ordinary Share Capital = Issue Price of Share * Number of Outstanding Shares
- The issue price of the share is the face value of the share at which it is available to the public.
- The number of outstanding shares. It is shown as a part of the owner’s equity in the liability side of the company’s balance sheet.
If you know the market cap of a company and you know its share price, then figuring out the number of outstanding shares is easy. Just take the market capitalization figure and divide it by the share price. The result is the number of shares on which the market capitalization number was based.
Do shares need to be fully paid?
Most companies are formed using the model articles for private companies limited by shares. These articles provide that, except for shares issued during the company formation process, all new shares must be fully paid up when they are issued.
What happens to money already paid by the holder of those shares?
Once shares have been forfeited, generally, the shareholder loses all rights under them and if the share was partly paid, has no right to recover the amount already paid to the company. The forfeited shares are then deemed to be owned by the company from the date agreed by the directors.
What will happen if you don’t make the call payment? Suppose you fail to pay the call money. In that case, the partly paid shares may be forfeited, i.e. the current partly paid shares you hold will be worthless and will not trade on exchanges as the company will allot new partly-paid shares under different ISIN.