What is the Significance of Paid Versus Unpaid Shares and Its Application to SMSF Special Purpose and Standard Companies?

The significance of paid versus unpaid capital relates to whether or not a shareholder has paid for their shares. If they have not paid for the shares, for example $1 per share, it will be unpaid or sometimes partly paid (if paid in part).

For ordinary shares, the company, including an SMSF company, can call upon at anytime this unpaid or partly paid share capital.

Generally most private companies record share capital as follows with no actual payment of funds into the entity:

Debt Cash on Hand

Credit Equity – Share Capital

When setting up any company you will be asked whether or not the share capital is paid or unpaid.

For LightYear Docs SMSF special purpose companies the share capital is a special class that is non-dividend paying. This meets the necessary requirements of the SIS Act.