List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Stocks Value Stocks. Table of Contents Expand. Par Value Stock. No-Par Value Stock.
Special Considerations. Par Value Stock vs. Key Takeaways A par value for a stock is its per-share value assigned by the company that issues it and is often set at a very low amount such as one cent. A no-par stock is issued without any designated minimum value. Neither form has any relevance for the stock's actual value in the markets. Unlike a stock, a bond has a real par value. The bond is worth its par value at maturity. Compare Accounts.
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Advertising and Marketing. More MACs. DEC More filters. Please Login to Mondaq or Register for unlimited free access and a complimentary news alert. The board may ask any price and the investor pays what the market will bear. But keep in mind that you are selling some percentage of your corporation with each share you issue or sell.
Why do they do this? Realizing that many people who are just starting their corporations are small start-ups companies, incorporators suggest low to zero par value so that the owners or initial shareholders will not need to make substantial investments into the corporations in order to own their companies at the time of organization. In the case of "no par" shares, they may be issued to the shareholders without the exchange of funds, goods, or services.
Having no par value will not restrict you in selling your shares to investors at the price determined by the board, and accepted by the investor, just like shares that do have a par value. Even though no par stock sounds great, it is not for everyone. In many cases, corporations will want to assign a par value so that an investment whether it be funds or services is required in order to own a share in the company.
In addition, franchise taxes for large amounts of no par stock in excess of 5, authorized shares can prove to be very expensive. If you have concerns about the impact of the number of authorized shares or the impact of the par value on your filing fees or franchise tax in Delaware , please feel free to contact us via phone or email.
This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances.
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We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results. Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available.
Kat Tretina Contributor. John Schmidt Editor. The Forbes Advisor editorial team is independent and objective. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive compensation from the companies that advertise on the Forbes Advisor site. This compensation comes from two main sources. First , we provide paid placements to advertisers to present their offers.
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