A company issued to shareholders 1,000,000 shares with a nominal value of €1 each at a price of €0.40 each. If the company winds up with a deficit, what additional amount, if any, can the shareholders be called on to pay to the company?

• A. Nil.
• B. €400,000
• C. €600,000
• D. €1,000,000

Answer: (C)

When a company is wound up, shareholders can be asked to pay the unpaid portion of their share capital up to the nominal value of the shares. Here, each share has a nominal value of €1, but only €0.40 has been paid, leaving €0.60 per share unpaid. For 1,000,000 shares, that unpaid amount totals €0.60 × 1,000,000 = €600,000. So the maximum additional amount that can be called from shareholders is €600,000. The other options don’t fit because nil would mean nothing is unpaid, €400,000 would reflect only what has already been paid, and €1,000,000 would imply demanding the full nominal value for all shares regardless of what has already been paid.