Question

The liability of the member of the company is limited to the extent of the ________ of the shares held by them.

• A. Unpaid value
• B. Paid value
• C. Nominal value
• D. All of the above

Answer 1

The correct option is C Nominal value

Also referred to as face value or par value, nominal value is the value shown on the face of a security certificate or instrument, including currency. The concept most commonly applies to stocks and bonds but is especially important to bond and preferred stock investors.Every share has a nominal (or par) value. It may be a £1 share or a 10p share, or whatever. The nominal value is usually expressed in sterling, but can be in any currency. A company may not issue any share at a discount, i.e. may not sell it for less than its nominal value: CA 2006, sec580.