What does fully paid and non assessable shares mean?
What does fully paid and non assessable shares mean?
“Fully paid” means that the company has received proper “consideration” (payment) for the shares. “Non-assessable” means that the investor isn’t required to make more payments to the company by reason of being a shareholder.
What are watered down stocks?
Watered stock is issued at a higher value than it is actually worth; it is accomplished by overstating the firm’s book value. Watered stock, once revealed for what it is, becomes difficult to sell, and if sold, is typically done so at a much lower price than originally obtained.
What is capital stock macroeconomics?
In economics, capital stock is the plant, equipment, and other assets that help with production. In accounting, this is approximated using the sum of the company’s common stock and preferred stock at the prices at which they were initially sold to the public during an offering.
What is non-assessable stock?
A non-assessable stock is a class of stock in which the issuing company is not allowed to impose levies on its shareholders for additional funds in order to make further investments. The maximum liability the purchaser of the stock assumes is equal to the initial purchase price of the shares.
What is a non-assessable policy?
A non-assessable policy is a type of insurance policy that cannot require the policyholder to pay additional funds to cover an insurer’s losses if the losses are greater than its reserves.
Why is watered stock illegal?
A share of a company that is issued at a value higher than the book value of the assets of the issuing company or higher than underlying assets is a watered stock. Shares of this nature are issued by companies as a way of tricking and cheating investors. Watered stock are known as securities fraud.
What does watered stock leads to?
Water retention can cause a person’s socks to leave marks on their legs. Swelling that is the result of water retention is generally benign. It can cause general puffiness or swelling in the hands, feet, or face.
What is capital stock with example?
Capital stock is the common stock and preferred stock that a company is allowed to issue according to its corporate charter. For example: If a company has issued 1,000 shares at a price of $5 per share, the capital stock value would be $5,000.
What is capital stock vs common stock?
Capital stock is the combination of a corporation’s common stock and preferred stock. Common stock is issued by every U.S. corporation. A small percentage of corporations also issue preferred stock. The stockholders’ equity section of the balance sheet will list the types and amounts of the capital stock.
What does Assessible mean?
capable of being
assessable – capable of being assessed especially for the purpose of taxation. nonexempt, taxable – (of goods or funds) subject to taxation; “taxable income”; “nonexempt property” 2. assessable – capable of being considered carefully; “the assessable qualities of art”
What does non policy mean?
nonpolicynoun. A rule or convention that is not formal policy. nonpolicyadjective. Not of or pertaining to policy.
What is the meaning of non assessable stock?
Definition of nonassessable : exempting the owner from further contributions to the capital or business of an issuing corporation and when fully paid for entailing no further liability on the part of the owner either to the corporation or its creditors nonassessable stock
What is assessable capital stock?
Assessable capital stock is capital stock that could subject shareholders to liabilities above what they paid for their shares. Assessable capital stock stands in contrast to non-assessable capital stock, where shareholders can only lose the amount they invested.
What is a non-assessable capital contribution?
: exempting the owner from further contributions to the capital or business of an issuing corporation and when fully paid for entailing no further liability on the part of the owner either to the corporation or its creditors nonassessable stock.
What happens to non-assessable stock in a bankruptcy?
Holders of non-assessable stock in the instance of bankruptcy or a lawsuit cannot be found liable and do not need to pay funds to debtors or individuals who may be suing the company. In the days when stock certificates were commonly issued, such types of shares would read “fully paid and non-assessable.”
