Share Par Value (Part 2)
After the Companies Act 2016
- Shares no longer have a par value
- Companies can determine their share price freely and use it to register Paid-Up Capital
- Share prices can vary, for example: RM0.20 per share or RM200 per share
High Share Price Situation
- Some companies may set a high share price
- For example, issuing shares at a higher price to achieve a higher Paid-Up Capital (e.g., RM500,000)
- However, a high share price may make it less attractive or harder for investors to invest
Solution: Share Split
- The company can carry out a share split
- This means increasing the number of shares while reducing the price per share
- Example: splitting 100,000 shares into 500,000 shares
- Share price decreases from RM5 to RM1
- The Paid-Up Capital remains unchanged (e.g., RM500,000)
Effect
- Lowers the share price
- Makes the shares more affordable and attractive
- Helps attract more investors