Non-Assessable Stock


DEFINITION of 'Non-Assessable Stock'

A class of stock in which the issuing company is not allowed to impose levies on its shareholders for additional funds for further investment. Non-assessable stocks typically have the words "fully paid and non-assessable" printed on the stock certificate.

These are the opposite of assessable stocks.

BREAKING DOWN 'Non-Assessable Stock'

Assessable stocks proved unpopular, and most companies switched over to issuing non-assessable stock in the early 1900s . Although equity was no longer sold at a discount compared to its share price, investors were more confident about buying non-assessable stocks because they no longer had to worry about the possibility that the issuer would force them to make more investments after the initial transaction.

  1. Equity

    Equity is the value of an asset less the value of all liabilities ...
  2. Issuer

    A legal entity that develops, registers and sells securities ...
  3. Stock

    A type of security that signifies ownership in a corporation ...
  4. Assessable Stock

    A class of stock in which the issuing company is allowed to impose ...
  5. Discount

    The condition of the price of a bond that is lower than par. ...
  6. Record Date

    The cut-off date established by a company in order to determine ...
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