What type of capital structure is permitted?
The shares which a company, by its articles, is authorized to issue may be divided into several classes having different attributes and a class may be issuable in series. All shares must be without nominal or par value. The essential features of such a share are that: · It represents a proportionate interest in the net worth and earnings of a company; · The articles do not attach to the share an arbitrary fixed dollar value (such as the par value system under the previous law); · The directors, acting in good faith, may determine the purchase price or consideration on the original issue of the share subject to the requirements laid down in the Act; · It avoids the potentially misleading impact of par value shares on unsophisticated investors the dollar value of which does not represent their current market value or liquidation value; · It permits greater flexibility in arranging the company structure of an entity. · Shares without par value may be issued at different prices per share f
