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face Value of shares

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What should be the minimum and maximum face value of Equity shares as per company act ?

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3 Replies

Ashish M (Chartered Accountant) (2731 Points)
Replied 18 April 2009

The answer to ur query can be found in the Sebi (DIP) guidelines below.....

3.7 Freedom to determine the denomination of shares for public / rights

issues and to change the standard denomination

3.7.1 An eligible company shall be free to make public or rights issue of equity shares in any denomination determined by it in accordance with Sub-section (4) of Section 13 of the Companies Act, 1956 and in compliance with the following and other norms as may be specified by SEBI from time to time:

i. In case of initial public offer by an unlisted company,

a. if the issue price is Rs. 500/- or more, the issuer company shall have a discretion to fix the face value below Rs. 10/- per share subject to the condition that the face value shall in no case be less than Rs. 1 per share;

b. if issue price is less than Rs. 500 per share, the face value shall be Rs. 10/- per share;

Provided that nothing contained in sub-clause (i) shall apply to initial public offer made by any government company, statutory authority or corporation or any special purpose vehicle set up by any of them, which is engaged in infrastructure sector.

ii. The disclosure about the face value of shares (including the statement about the issue price being “X” times of the face value) shall be made in the advertisement, offer documents and in application forms in

identical font size as that of issue price or price band.)

3.7.2 The companies which have already issued shares in the denomination of Rs.10/- or Rs.100/- may change the standard denomination of the shares by splitting or consolidating the existing shares.

3.7.3 The companies proposing to issue shares in any denomination or changing the standard denomination in terms of clause 3.7.1 or 3.7.2 above shall comply with the following:

(a) the shares shall not be issued in the denomination of decimal of a rupee;

(b) the denomination of the existing shares shall not be altered to a denomination of decimal of a rupee;

(d) the companies seeking to change the standard denomination may do so after amending the memorandum and Articles of Association, if required;

(e) the company shall adhere to the disclosure and accounting norms specified by SEBI from time to time.

Hariharakrishnan (Officer) (46 Points)
Replied 05 May 2010

One of our Clients wouild like to transfer his shares to four others.

Could somebody tell me what is the procedure, whether the shares can be split into smaller values, whether the same certificate numbers could be maintained or fresh certificate numbers are to be allotted, etc. Also it would be helpful if request letter (format) for transfer of shares is also available.

CA Tejas Andharia (CA.) (2351 Points)
Replied 25 June 2013

Is there any limit for private limited company? suppose XYZ private limited wants to keep face value of share to Rs. 50,000/- each. Is there any prohibition on this?