What is the value of a share in a limited company?

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Could someone please explain how much company shares are actually worth? I was thinking about setting up a company limited by shares but I’m not sure how to find out what value I should make each of my shares. Is there a set amount, or is it up to you, or does it depend on the amount of money you start your business with? Thank you.

Answers

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Limited company shares have a nominal value and a real value. You can assign any nominal value to your company shares, but most people choose a standard nominal value of £1. The nominal value is the amount you have to pay the company for the share - this sets the limited liability of the shareholders.

The real value is what each share is worth when it is sold from one shareholder to another, or when the whole company is sold. The real value of a share can, therefore, vary considerably and usually determined by the appraised market value of the company.

You can issue any quantity of shares. You can issue one or more shares and keep them for yourself. Or you can a larger quantity and sell some of them to other people in exchange for capital investment in the business.

a year ago
 

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