Duhaime's Law Dictionary


Par Value Shares Definition:

Shares of equal value; issued by a company which have a common stated price.

Related Terms: Share, Stock, Watered Stock

Shares issued by a company which have a set minimum price; the face value of a stock or bond.

"... par value shares are shares with a specified and fixed value in the memorandum or notice of articles."1

Lawyer Anna Juch wrote in Company Law Deskbook:

"A company must have one or both kinds of shares, with par value or without par value.

"The par value of par value shares must be expressed in reference to a currency."

McGuiness writes an excellent summary of the law:

"In some jurisdictions, the shares that a company is authorized to issue may have or be required to have a par value. Par value is a monetary face value assigned to a share in a corporation under a corporate constitution.

"Although the par value has no significance in fixing the market value of a share, the amount of the issued capital of a corporation is determined by multiplying the number of issued shares by the par value of those shares.

"Par is a synonym for equal, and in this context, par value means that all shares of a given class in a corporation were issued for at least an equal consideration."

Shares which are without par value or "non par value shares" are shares which may be sold at whatever price the company's board of directors decides or sets.

REFERENCES:

  • Juch, Anna, Company Law Deskbook (Vancouver: CLEBC, 2011), at §3.1
  • Lundell, John and others, BC Corporations Law Guide (Toronto: CCH Canada, 2008), ¶5030 - NOTE 1
  • McGuinness, Kevin, Canadian Business Corporations Law, 2nd Ed. (Toronto: LexisNexis, 2007 ), page 392

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