Partly paid shares in a company are ones in respect of which only a partial payment (or deposit) has been made, with the understanding that as the company requires more funds, calls will be made from time to time until the shares are fully paid, when no further calls can be made.
Calls on shares
Calls on partly paid shares may be made in accordance with a schedule of calls set out in the company's original prospectus or it may be made at the discretion of the directors.
When a call is made, each shareholder affected by the call becomes a debtor of the company, until each debt has been satisfied. The usual rules of debt collections apply to such debts. The obligation to pay a call flows with the share, so that it falls on the person who is the owner of the relevant shares at the time a call is made. The obligation falls on the owner at the time of a call, who may have disposed of the shares by the time payment is due, so that the new owner is free of the obligation to pay the call.
For a limited liability company, the legal right of the company to make calls and the obligation to pay them ceases when shares become fully paid. In Australia, a mining exploration company may be formed as a no liability company, which is not able to make calls on shares, even on partly paid shares.