# Company Limited by Shares — Section 2(22)
## Definition
A company limited by shares is a registered company having the liability of its members limited to the amount, if any, unpaid on the shares respectively held by them.
## Key Features
1. Liability Cap: Limited to the unpaid amount on shares.
2. Timing of Call: The unpaid amount can be called anytime — including during winding up or as a going concern.
3. Fully Paid Shares: If shares are fully paid-up, the member has nothing more to pay.
## Numerical Illustration
| Scenario | Face Value | Amount Paid | Maximum Liability |
|---|---|---|---|
| Partly paid | Rs. 10 | Rs. 7 | Rs. 3 per share |
| Fully paid | Rs. 10 | Rs. 10 | NIL |
## Why It Is Popular
This is the most common form of company in India because:
- Members enjoy certainty of maximum liability.
- Risk to members is capped at investment.
- Easy to compute liability — simply look at unpaid amount.
## Memory Aid
'Pay only what's unpaid' — that is the essence of limited liability by shares.