What Is a No-Par Value Stock?

Denomination stocks are also called "no par value stocks," "proportion stocks," or "share stocks." "Symbol of Denomination". The amount is not recorded on the par, but only the number of shares or shares that account for the total share capital. "1 share", "10 shares" or "1 in 10,000 shares" are marked on the ticket. Its value changes with the increase or decrease of the net assets of the issuing company. When the net assets of the issuing company increase, the stock price rises, and vice versa, it decreases; Funds corresponding to the total amount of issuance should, in principle, be fully included in the capital of the issuing company. Only in special circumstances can a small part of it be used as capital reserve.

Denomination stock

Denomination stocks fade

There are two types of denomination stocks: Pure denomination stocks. That is, stocks whose par value is not recorded on the stock parcel or in the Articles of Association. Declared non-denominated stock. That is, although the amount is not marked on the parcel, the amount per share is recorded in the "Articles of Association". ^[1]

1. More flexible issue or transfer prices

As there is no par value, non-denominated stocks are not subject to the restrictions on the issue of par value. The issue price can also fluctuate with the company's economic benefits. When transferring, investors are not easily confused by the par value of the stock, but pay more attention to analyzing the actual value of each share. It can increase the circulation quantity and circulation speed of stocks, and has stronger circulation.

2.Easy stock split

If the stock has a denomination, it is necessary to go through the procedures for changing the denomination. Since no-denomination stocks are not constrained by par value, the company issuing the shares can more easily perform stock splits.