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The Legislative Yuan passed an amendment to the Company Act on July 6, 2018 which is the most significant revamp of the law since 2001. With the text published on August 1 by the president and approved by Executive Yuan Order 1070037184 on October 26, the amended Company Act became effective on November 1, 2018. The main thrust of the amendment is to improve local and international business environment. One of the amended articles, Article 156-1, now allows a company limited by shares to issue non-par value stock. Another amendment worth noting is Article 157, which allows a non public offering company to issue Preferred Stock with multiple voting right or veto power over specific matters on the exercise of voting power.
This study aims to investigate the real impact of non-par value stock and multiple voting rights of preferred stock on non public offering companies that issue them. The research results are the following.
(1) The issuance of the types mentioned above of shares provide flexibility to the valuation of shares and are positives for corporate financing and market vitality.
(2) Such issuance creates a healthy environment for startup firms to thrive with consolidated ownership and management power.
(3) Investors would apply more stringent assessment on the real value of stocks.
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