Fully Paid, Partly Paid and Unpaid Shares
When issuing new shares directors need to determine whether these shares should be issued fully paid, partly paid or nil paid. However what does this mean and what impact will this have if the shares are subsequently transferred?
This month we have produced a guide for company directors, secretaries and administrators on what it means if shares are issued other than fully paid. This includes a discussion of nominal value, the company law issues to consider if partly paid or unpaid shares are issued and perhaps most significantly, how the process of transferring shares differs if shares are not fully paid.
Our stock transfer form (J30) is one of our most popular corporate documents, however it relates only to fully paid shares. If shares are not fully paid, a different stock transfer form must be used to ensure that the liability to pay further calls on the shares is also transferred. We have therefore clarified the difference between stock transfer form J30 (for use with fully paid shares) and form J10 (for partly paid shares) in our new guidance note and added a brand new stock transfer form (J10) to our corporate templates.
The new and updated templates added this month are designed to help customers better understand this key element of their company’s share capital, either when setting up as a new business or as their company evolves.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.