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by Undo Capital
December 15, 2025
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What Is Nominal Value (Par Value)?

Nominal value, also called par value, is the fixed minimum legal value assigned to a company’s shares at the time of incorporation.

Nominal Value (Par Value) Meaning

The nominal value's meaning is rooted in company law rather than market pricing. To define nominal value in practice, it is the base price at which shares are issued in legal documents, often a very small amount, such as £0.01 per share. A clear nominal value (par value) definition is important because it sets the minimum price at which new shares can legally be issued and is used to calculate share capital on the balance sheet. Nominal value does not reflect what investors actually pay; that is determined by valuation and share price.

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Disclaimer: Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. We do not provide investment advice, financial advice, or tax advice, nor are we regulated by the Financial Conduct Authority (FCA). Participating in startups and early-stage enterprises carries inherent risks, including limited liquidity, absence of dividends, potential loss of investment, and dilution. Any decisions regarding investments should be made independently by the investor as part of a well-diversified portfolio.