Called up share capital

[BubbaWY]

I am just trying to get my head around 'Called up share capital' listed in a companies accounts under Capital and Reserves. As I understand it, it means shares which have been distributed but not paid for in full.

If a company was to be wound up, would these shareholders have to pay in full for these shares, with the money then distributed to creditors?

 

[MyAccountantOnline]

I am just trying to get my head around 'Called up share capital' listed in a companies accounts under Capital and Reserves. As I understand it, it means shares which have been distributed but not paid for in full.

If a company was to be wound up, would these shareholders have to pay in full for these shares, with the money then distributed to creditors?

Called up share capital is the amount of share capital which the company has asked its shareholders to pay.

If the shares are unpaid you will also see an entry on the balance sheet for unpaid share capital.

 

[BubbaWY]

Thank you for your reply. So, in practical terms what does the following example mean? The company is actually £750k in debt?

Capital and reserves
Called up share capital £250,000
Profit and loss reserves (£750,000)

Total equity (£500,000)

 

[Mark T Jones]

It means that they are insolvent to the tune of £500K (in other words, if they stopped trading, after everything had been sold, there would be a half million shortfall.

I*n reality it might be different, if, for example there are under-valued fixed assets.