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Registering a company

Must shareholders pay for their shares?

In a private limited company there is no obligation for the shareholders to pay for the shares they own. If the company decides that its shares should be ‘paid up’ then payment for those shares is made into the company’s own funds and those payments must be available. If shares are ‘paid up’ and the company subsequently goes into liquidation, there may be no further claim on the shareholders*.

If shares are not ‘paid up’ and the company goes into liquidation due to debt, the shareholders will be required to pay the creditors the value of the shares that each shareholder owns.

* A director may be liable to further claims if it can be shown that they acted illegally, negligently or irresponsibly.

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