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share having no face value

Others 1468 views 7 replies

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

Replies (7)

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.

no

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

 

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

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

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

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.

Thank you

Sunil

 

Theoritically NO,but practically i found some of the scriptt traded in NSE,earlier I do not remember scriptt name do have 0 fv,


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