Nominal value is the face value assigned to a share — commonly £1 or one penny — which sets what the holder owes the company if the share is unpaid.
It has nothing to do with what the share is worth. Issuing a hundred penny shares rather than one pound share costs the same and divides far more cleanly when a second shareholder arrives, which is why the single £1 share is the most commonly regretted decision at formation.
Related terms
- Share capital — Share capital is the total nominal value of the shares a company has issued, recorded in a statement of capital at Companies House.
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