When you start or grow a company, issuing shares to investors, partners, or team members is a key part of raising capital and allocating ownership. But what happens when those shares aren’t fully paid for upfront?
That’s where “calls on shares” come in.
If you’re a business owner or director, understanding how calls work—and what your legal obligations are—is essential for staying compliant under the Companies Act, No. 07 of 2007 (Sri Lanka).
🔍 What Is a Call on Shares?
A call on shares is when a company formally requests a shareholder to pay part (or all) of the remaining amount owed on their shares—or to fulfil another obligation attached to those shares.
This happens when:
- Shares are not fully paid at the time of issue, or
- There is a non-cash obligation linked to owning the shares (such as delivering services, assets, or other consideration).
✅ Example:
Let’s say you issue 1,000 shares at Rs. 10 each, but ask shareholders to pay only Rs. 5 upfront. Later, you can make a call for the remaining Rs. 5 per share.
🏢 What Does the Law Require? (Section 55)
Once a shareholder has:
- Paid the call amount, or
- Completed their obligation (like delivering a promised asset or service),
Your company has 10 working days to notify the Registrar of Companies.
This notice must include:
- 📄 The amount of the call, or its value (if it wasn’t paid in cash), and
- 📊 The updated “stated capital” of the company after receiving the payment or benefit.
⚠️ What Happens If You Don’t File the Notice?
Failing to comply is a legal offence. If your company does not submit the notice within 10 working days:
- 🏢 The company can be fined up to Rs. 50,000, and
- 👨💼 Each responsible officer (e.g., directors, company secretary) can be fined up to Rs. 50,000 individually.
💡 Reminder: These penalties apply per instance, so missing multiple filings can quickly become expensive and damaging to your reputation.
🧾 Step-by-Step: What to Do When Making a Call on Shares
| ✅ Step | 📌 Action |
|---|---|
| 1️⃣ | Make the official call on unpaid shares or obligations |
| 2️⃣ | Receive the payment or fulfilment from the shareholder |
| 3️⃣ | Update your stated capital records accordingly |
| 4️⃣ | File a notice with the Registrar within 10 working days |
| 5️⃣ | Keep a record of the call, receipt, and filing for future reference |
📈 Why This Matters to You as a Business Owner
- ✅ Keeps your company legally compliant
- ✅ Protects your officers from personal penalties
- ✅ Ensures accurate shareholding and capital reporting
- ✅ Improves investor confidence and regulatory credibility
Whether you’re working with external investors or closely held shareholders, properly handling calls on shares shows professionalism and responsibility.
🧑💼 Need Help?
Issuing shares and making calls can seem straightforward—but the legal and financial details matter.
If you’re planning to make a call on shares, or need help with Registrar filings, talk to your:
- 📘 Company secretary
- 📋 Corporate lawyer
- 📊 Chartered accountant
They’ll help you stay compliant, avoid penalties, and maintain a clean corporate record.
