What are 'Fully Paid Shares'

Fully paid shares are shares issued for which no more money is required to be paid to the company by shareholders on the value of the shares. When a company issues shares upon incorporation or through an initial or secondary issuance, shareholders are required to pay a set amount for those shares. Once the company has received the full amount from shareholders, the shares become fully paid shares.

BREAKING DOWN 'Fully Paid Shares'

Fully paid shares are different from partially paid shares in which only a portion of the market value has been received by the company. In the case of partially paid shares, the shareholder is still required to pay the remaining amount to the company. For example, let's say Company XYZ sells shares for $50 per share. If the company receives $50, the share is a fully paid share, but if less than $50 has been collected, it is a partially funded share.

For accounting purposes, companies issue shares with a par value, which is a nominal amount, such as $1. Typically, however, the market value is much higher, and the amount over the par value is called the share premium.

Normally, shares issued are fully paid. That is, investors pay the full amount per share. Sometimes companies will issue unpaid or partially paid shares, however, if the shareholder needs time to access the necessary funds but commits to a payment schedule. In some cases, issuing unpaid shares may also be more convenient for a start-up company.

RELATED TERMS
  1. Share Capital

    Share capital refers to funds raised by issuing shares in return ...
  2. Issued Shares

    Issued shares are the number of authorized shares sold to and ...
  3. Fully Valued

    A fully valued stock is a stock whose price analysts believe ...
  4. Shareholder Register

    A shareholder register is a list of active owners of a company's ...
  5. Fully Diluted Shares

    Fully diluted shares is the total number of shares that would ...
  6. Fully Subscribed

    Fully subscribed means an underwriting firm has successfully ...
Related Articles
  1. Investing

    Know your shareholder rights

    Common-stock owners have numerous privileges and should be vigilant in monitoring a company. Read on to learn what rights you have as a shareholder.
  2. Investing

    Balance Sheet: Analyzing Owners' Equity

    Analyzing owners’ equity is an important analytics tool, but it should be done in the context of other tools such as analyzing the assets and liabilities on the balance sheet.
  3. Investing

    Valuation Of A Preferred Stock

    Determining the value of a preferred stock is important for your portfolio. Learn how it's done.
  4. Financial Advisor

    Income tax on mutual funds: The basics

    Learn about the basics of income tax on mutual funds, including what types of income may be subject to the capital gains tax rate.
  5. Investing

    Everything Investors Need To Know About Earnings

    We go over the concepts behind the excitement over the most important figure in the stock market.
  6. Investing

    What's Your Stock's Repurchase Premium?

    Take a closer look at your favorite stock's statement of equity; you never know what you're going to find
  7. Investing

    6 Bad Stock Buyback Scenarios

    Buying back shares can be a sensible way for companies to use extra cash. But in many cases, it's just a ploy to boost earnings.
  8. Investing

    The Highest Priced Stocks In America

    These stocks don't come without a hefty price tag. But are they worth it?
RELATED FAQS
  1. How does a share premium account appear on a balance sheet?

    Learn where a share premium account shows up on a balance sheet and for what purposes funds in a share premium account may ... Read Answer >>
  2. What are the advantages and disadvantages of preference shares?

    Learn about the advantages and disadvantages of preference shares for both investors and issuing companies. Read Answer >>
  3. What are the types of share capital?

    Companies obtain share capital by selling ownership shares to the public. The two types of share capital are common stock and preferred ... Read Answer >>
Trading Center