Some facts about no par value shares

March 5, 2013 - by Nida U.

Some facts about no par value shares.

In general no par value shares are shares for which the articles of incorporation do not fix a par value.

If no par value shares are chosen, then clearly company capital is unknown. Those shares can be of any value! Only when these shares are issued to shareholder value has to be stated. This is beneficial, for investment vehicles especially, as it brings more flexibility and higher prices can be set at latter stage when offering shares to new investors or shareholders.

There is just one thought for idea, government fee is higher when setting up a company with no par value, therefore consider if you need this. I have had several clients wanting this and then wanting to issue all of the shares to their shareholders straight away… Makes no sense! Best when setting up company with no par value shares is to keep some or as many as you can as treasury shares and use them in future when needed, this way maintaining the secrecy about companies capital and possibility to decide upon the value just before issuing those shares!

Thank you for reading my post! And you are welcome to leave comments, feedback, suggestions for other posts or contact me for more information.

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