The Companies Act 2016 has migrated towards the no par value regime like countries such as New Zealand and Australia. Explain the concepts and changes brought by the new regime.

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NO MORE ISSUING SHARES AT PAR VALUE No par value shares Section 74. - All shares issued before or upon the commencement of this Act shall have no par or nominal value. This means companies need not set the share premium will not "disappear" even if the companies do nothing, If you any minimum values for the shares issued. just leave it there, the share premium will be merged into share capital - it is only EFFECTS an accounting treatment. Enable a company to raise capital with greater flexibility e.g. shares can be issued at a discount and profit can be capitalized without the (Edge Weekly - Debunking misconceptions about no-par-value regime) issuance of new shares. The directors now have the discretion and the duty to determine the appropriate value for the shares when issued. The company's share premium account and capital redemption reserve account will now be merged with the company's share capital. There is a transitional period of 24 months to utilise the amounts in the share premium account and the capital redemption reserve account. (simplification of co's account) where share premium account and reserves will no longer be applicable . Rationale of change: * The following concepts tied to par value under the current Companies Act 1965 will be abolished: The previous par value regime did not reflect the true value of a share share premium account (representing the total premium over par value or the company. paid for shares); . capital redemption reserve Share price will now be determined by: Whenever a company redeems its preference shares then the nominal value or face value of the shares is put into capital redemption reserve Current market value of the company fund. There after this fund becomes the part of the paid capital of the Business circumstances i.e. internal and external factors company. authorised share capital (which represents the maximum number of shares a company can issue multiplied by its par value). From an accounting perspective, the introduction of the no par value regime aligns with international standards and will help simplify the accounting treatment of share capital. Profit capitalization Converting a company's retained earnings to capital