Should shares in a Limited Company be paid for?

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First, let’s look at what we mean by paid for. Paid for indicates that the value of the shares in a limited company have been paid into the company’s bank account (or other fund such as petty cash). A company can have both paid shares and unpaid shares; it’s not a case of all or nothing.

So should the shares in a limited company be paid for?

It’s up to the company. Shareholders in a private limited company are not obliged to pay for the shares that they own.

If the company were to go into liquidation due to debt, shareholders would be required to pay (creditors) the value of their shares. However, if they had already been paid for, nothing else would normally be required from the shareholders.

Please let us know if you have any questions via the comments function below.

This post was brought to you by Mathew Aitken at Companies Made Simple – The Simplest Company Formation Service

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