As per the description of Chapter 4 (2009 material - page 16) --, I worked out solution like this: Original issue price of share: 25p + 15p prem = 40 p Amount paid : 20p per share So, in case of winding up, the balance of 20p (40p for fully paid up less 20p paid so far) should be called for and be the liability of shareholder. => 5000 * 20p = 1,000 Pounds. Answer B. But the answer is A which requires to us to just call of (nominal value of share 25p less already paid value 20p = 5p * 5000 = 250 pounds). But the description in the notes appears to get us answer B. Can someone clarify what I am missing?? Appreciate prompt response - my exam is on 28th Oct - India. Thanks, Raj
Hello there, Since the "fully paid up" value of the shares is 25p, of which only 20 has been paid, there is an outstanding balance of 5p on each share. Therefore for 5000 shares the shareholder will be liable to a maximum of 250 pounds in the event of liquidation. Your going wrong here because the 15p premium is simly there to confuse you. Im pretty sure that if shares are issued on a partly paid basis the premium must be paid up at the outset anyway, so even if the nominal value was 25p of which 20 was paid up, the answer wouldnt change since the premium would need to be covered however you may want to check this in the notes since it feels like i took CT2 a lifetime ago now
Thanks Ok, let me remember this way: # of shres * (Par value of share less paid value per share) will be the liability. Thank you. Raj
