Arkansas Amendment of common stock par value
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How to fill out Amendment Of Common Stock Par Value?
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FAQ
For example, if you set the par value for your corporation's shares at $1, all purchasers of the stock must pay at least this amount for every share they purchase. If you purchase 10,000 shares, you'll have to pay at least $10,000 for them. If you pay only $5,000, you'll owe your corporation another $5,000.
Par value, also known as nominal or original value, is the face value of a bond or the value of a stock certificate, as stated in the corporate charter. Stock certificates issued for purchased shares show the par value.
Most early stage startups issue stock at a nominal par value of about $. 00001. In other words, if a founder purchases 5,000,000 shares of common stock at a par value of $. 00001 per share, that founder would pay $50 to the company.
Par Value for Common Stock With common stocks, the par value simply represents a legally binding agreement that the company will not sell shares below a certain price, such as $0.01.
The par value of shares sets only a bottom limit for your business, but the board of directors may set the price of stock at any amount above par. Let's say your par value is $. 01 but the board of directors sells stock to an investor for $5.00 per share. This is perfectly legal.
A par value of $0.01 for common stocks in finance means that the declared value of the common stock in the articles of incorporation is $0.01. The other term for par value is face value because it is the amount on the face of the corporation's charter or the stock certificate.
Typically, you can't just make an amendment saying you now have a new par value. Instead, the most common way that corporations change their par value is with a stock split (or reverse stock split). A stock split is exactly what it sounds like: a division of shares.
?Par value? or ?face value? is the lowest price for which a company can sell stock. ?Fair Market Value? is the notional value of stock on the market at the time of sale. A reasonable par value for an early stage company can be as low as $0.00001. Setting a par value low can avoid tax liabilities later.