Why do Companies Subdivide their shares?? or Consolidate their Shares?? what is the company's advantage in doing that?? pls help...!
1 Replies
Prakash
(Chartered Accountant)
(560 Points)
Replied 18 September 2011
To make the Transferability of shares more convenient
For Example a shore holder holding 10 shares of 100 each and if his shares got sub divided into 100 shares of 10 each, now he can sell 5 sahes of 10 each, he is just transferring 5% of his holding. Previously he has to transfer min 10% as share itself 100
Same as above if the nominal value is too small they can consolidate the same
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