partly paid share

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A share the full par value of which has not been paid by the shareholder. Formerly, partly paid shares were issued by some banks and insurance companies to inspire confidence, i.e. because they could always call on their shareholders for further funds if necessary. Shareholders, however, did not like the liability of being called upon to pay out further sums for their shares and the practice largely died out. It has been revived for large new share issues, especially in privatizations, in which shareholders pay an initial sum for their shares and subsequently pay one or more calls on specified dates. Compare fully paid share. See also called-up share capital; paid-up share capital.

Subjects: Financial Institutions and Services — Accounting.

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