Assessable stock

Assessable stock is stock sold with a lingering obligation attached: the issuing company (or its creditors) can levy an assessment — a demand for additional payment — on shareholders after the initial purchase. This usually arose when shares were originally issued below par value, leaving holders on the hook for the difference if the company later needed the capital.

Assessable shares were a feature of an earlier era of corporate finance, particularly among banks and mining companies. Modern shares are virtually always issued as fully paid and non-assessable, meaning once you've paid for the stock, you can never be forced to contribute more — your maximum loss is your investment.

So why does the term survive on licensing exams? Because of how the Uniform Securities Act defines an "offer" and "sale." Normally, a genuine gift is neither. But a gift of assessable stock is treated as both an offer and a sale, since the recipient takes on a potential future payment obligation — the transfer isn't truly free. That wrinkle makes assessable stock a favorite trick concept in the definitions portion of state law exams.

Expect to see assessable stock on the NASAA exams — the Series 63, Series 65, and Series 66 all cover it under the definitions of offers and sales, and the gift-of-assessable-stock rule is the detail most worth memorizing.