No Par Value Shares Definition

The par value of a share is the value stated in the corporate charter below which shares of that class cannot be sold upon initial offering.

No par value shares definition. After the implementation date of the companies act a pre existing company may not authorise any new par value shares authorise any shares having a nominal value or do any subdivision thereof. No par value stock is shares that have been issued without a par value listed on the face of the stock certificate historically par value used to be the price at which a company initially sold its shares. The intent behind the par value concept was that prospective investors could be assured that an issuing company would not issue shares at a price below the par value. Normally when a business is incorporated the corporate charter assigns a par value or base value for every share that will be issued.

A no par value stock is issued without the specification of a par value indicated in the company s articles of incorporation or on the stock certificate itself. The objectives of its issuance include 1 avoidance of taxes levied according to the share s face value 2 avoidance of the issuer firm s liability to shareholders in the event the shares have to. Par value for stock. The board must determine the price or other adequate considerations at which shares may be issued.

No par value stock sometimes called no par stock is a class of stock that was never assigned a par value or stated value. No par value share. Par value of shares also known as the stated value per share is the minimal shares value as decided by the company which is issuing such shares to the public and the companies then will not sell such type of shares to the public below the decided value. The issuing company promises not to issue further shares below par value so investors can be confident that no one else will receive a more favorable issue price.

This has no relevance to the value of either in the market. Instead the stock will be sold based upon what investors will pay for the shares. A type of stock share that is issued in its initial public offering or ipo without a stated par value listed. Shares issued in terms of the 2008 act have no nominal or par value.

What is par value of share. In other words it is the share nominal amount 1 0 1 or 0 001 mentioned on the stock certificate at the time. There is a theoretical liability by a company to its shareholders if the market price of its stock falls below the par value for the difference between the market price of the stock and the. Par value is the stock price stated in a corporation s charter.

However par value is now usually set at a minimal amount such as 0 01 per share since some state laws still require that a company cannot. Share issued with no par value specified either on the share certificate or in the issuer firm s charter or prospectus.