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share having no face value

Mriganka Bhattacharyya (Articled Assistant) (31 Points)

24 December 2008

can there be a share having no face value??????

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7 Replies

abhishek bhatt (CA student) (136 Points)
Replied 24 December 2008

no it is not possible that share do not have its nominal value as if issued and subsribed by general public it has to be mentioned in b/s as it represents monetaty part and so has to be a/cted.

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Rupesh Maheshwari (ACA, Dip. IFR (ACCA)) (6166 Points)
Replied 24 December 2008

but there was a fill in the blank question in my bcom exam

A share having no face value is called.......................

abhishek bhatt (CA student) (136 Points)
Replied 24 December 2008

it is not possible only then why will co. issue and how it will be decided how much is premium

abhishek bhatt (CA student) (136 Points)
Replied 24 December 2008

it is not possible only then why will co. issue and how it will be decided how much is premium

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Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 24 December 2008

Share issued with no par value specified either on the share certificate or in the issuer firm's charter or prospectus. 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 be sold at a discount, and (3) elimination of investor confusion over the par value and the real (market) value of the share. Cash proceeds from the share-sale are accounted for by debiting the cash account and crediting the capital share account, thus assigning an implicit value to the issued shares. No par value shares may be disadvantageous to shareholders where the firm lowers the value of already issued shares by accepting lower price for the new issue. Also called no par value stock, such shares are common in Belgium, Canada, and the US, but illegal in the UK. Also caled no par share. See also stated value.