What are the advantages / disadvantages of forming a company with a very high share value?
Advantages 1. Creates an image of a substantial, credible and secure company 2. Suggests the new company has a lot of ambition 3. Nominal value of shares owed means creditors and suppliers will have more confidence in the owners, due to increased limited liability based on the very high share value Disadvantages 1. Increases the liability of the shareholders – if a company is dissolved or unable to pay its bills, the nominal value of all issued shares must be paid by the shareholders. A very high share value will mean a very high liability in this regard