Call Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Call, written in plain English, along with examples of how it is used.

What is Call?

History and Meaning of Call

In the financial world, a "call" is a term used for a demand for payment that may be required when purchasing certain stocks or other investment vehicles. This demand is typically made by a company to its shareholders to pay the installment of share capital that is due. A "call" is generally required when a company needs to collect additional funds or capital through the issuance of new shares of stock, and it can be an essential tool for securing funding for future projects or expansion.

Examples of Call

Here are a few examples of how the term "call" might be used:

• Company XYZ has issued a call to its shareholders, requesting that they pay their portion of the share capital due to finance the upcoming expansion project.

• The investor received a call from their stockbroker, alerting them that they needed to pay the call on their shares so that they would not lose their investment.

• The company's board decided to issue a call on its outstanding shares so that it could raise the funds necessary to complete the new headquarters building.

Legal Terms Similar to Call

Here are a few related terms that are often used in the financial world:

• Dividend: This is a payment made by a company to its shareholders out of its profits, typically as a reward for investing in the company.

• Stock: A share of ownership in a corporation, typically representing a unit of value and carrying voting rights for certain company decisions.

• Bonds: A type of security issued by a corporation or government that can be bought and sold as an investment, with interest paid to the buyer at predetermined intervals until the bond reaches maturity.

• Shareholder: A person or institution that owns stock or shares in a corporation, entitling them to a portion of the company's profits and voting rights on certain decisions.