Assessable stock refers to a form of stock that the issuer can sell if the holder fails to pay any imposed assessment on it. Stock represents ownership in a company and grants the holder the ability to participate in the company’s management and receive a portion of its profits. Assessable stock differs from non-assessable stock, as the holder’s liability is restricted to the amount paid for the stock and cannot be compelled to provide additional funds to cover the issuer’s debts.
Assessable stock refers to a type of stock that can be reclaimed by the issuer if the holder fails to pay any imposed assessment. This implies that if the company requires additional funds, they can impose an extra charge on the stockholders. If the stockholder fails to make the payment, the company has the right to retrieve the stock. For instance, if a company needs to raise more capital, they may impose an assessment on their assessable stock. In the event that a stockholder fails to pay the assessment, the company can reclaim the stock and sell it to another individual who is willing to pay the assessment. However, assessable stock is not commonly utilised nowadays, as most stocks are non-assessable. This means that the stockholder’s liability is limited to the amount paid for the stock and they cannot be obligated to pay additional funds to cover the issuer’s debts.
Assessable stock refers to shares of a company’s stock that have not been fully paid for by the shareholder. These shares require additional payments or assessments to be made by the shareholder to fully own the stock.
Fully paid shares are shares that have been paid for in full by the shareholder and do not require any additional payments. Assessable stock shares, on the other hand, require additional payments to be made by the shareholder to fully own the stock.
Yes, a company can issue assessable stock if it is allowed by the laws and regulations of the jurisdiction in which it operates. However, assessable stock is less common in modern corporate practices.
If a shareholder fails to make the required assessments on assessable stock, the company may have the right to take legal action against the shareholder. This can include selling the shares to recover the unpaid assessments or taking other appropriate legal measures.
Yes, assessable stock can be converted into fully paid shares if the shareholder makes the required assessments and pays the outstanding amounts. Once the assessments are fully paid, the shares become fully paid and the shareholder has complete ownership of the stock.
The transfer of assessable stock may be subject to certain restrictions, depending on the company’s bylaws and any applicable laws or regulations. These restrictions may include obtaining approval from the company or other shareholders before transferring the shares.
Assessable stock is generally not issued by publicly traded companies. Publicly traded companies typically issue fully paid shares that can be freely traded on stock exchanges.
Owning assessable stock may provide certain advantages, such as the potential for lower initial investment costs compared to fully paid shares. However, it also carries the risk of additional assessments that need to be paid.
Yes, a company may have the right to cancel or redeem assessable stock under certain circumstances, as specified in its bylaws or other governing documents. This could occur if the shareholder fails to make the required assessments within a specified timeframe.
The assessability of a stock can usually be determined by reviewing the company’s articles of incorporation, bylaws, or other governing documents. Additionally, consulting with a legal or financial professional can help clarify the status of a particular stock.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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