Proposal for Uniform Par Value on Shares

In a previous post, we discussed the difficulties posed by the current system of par value of shares whereby companies are free to determine the par value of their shares. Some of these difficulties will be addressed in SEBI’s proposal to create a uniform par value system for all listed companies. However, the current proposal falls short on two counts: (i) unlisted companies can still have differing par values on their shares (as SEBI is only concerned with listed companies’ shares), and (ii) it does not go as far as abolishing the par value system altogether as we have previously considered. Perhaps these are matters to be viewed from a larger perspective by Parliament while amending the Companies Act.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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