ACCA Corporate and Business Law (F4) Certification Practice Exam

In the context of shares issued by a public company, the concept of being "fully paid" means that the shares have been paid for in full by the shareholder, eliminating any potential liability for unpaid calls on the shares. In many jurisdictions, especially under the Companies Act in the UK, a minimum payment requirement is established for shares when they are first issued.

The correct answer indicates that only 50% of the nominal value must be paid at the time of issuance. This allows flexibility for the company, as it does not require the full amount to be paid upfront, enabling it to raise capital more effectively while still ensuring that shareholders maintain a commitment to fully fund their shares.

Typically, any remaining amount can then be called upon by the company in the future, meaning shareholders may need to pay the balance at a later date as determined by the company’s needs or circumstances. This approach is particularly beneficial for public companies as it can attract more investors who may not have the full nominal value available at the time of purchase.

Understanding this 50% minimum payment requirement is essential for recognizing how capital structure is managed in public companies and how it impacts shareholder obligations and company financing strategies.