Rhode Island Amendment of Common Stock Par Value: A Detailed Description In Rhode Island, an amendment of common stock par value refers to the modification of a corporation's capital structure by changing the designation of the par value assigned to its common stock. Par value is the nominal dollar value assigned to shares of stock when they are initially issued, indicating the minimum price at which these shares can be issued or sold. The Rhode Island Amendment of Common Stock Par Value can be categorized into two types: decrease and increase. 1. Decrease of Common Stock Par Value: When a corporation goes through a decrease in the par value of its common stock, it essentially reduces the minimum selling price of its shares. This could be initiated for various reasons, such as to increase the marketability of the stock, facilitate further public offerings, or adjust the stock's value in alignment with its market price. Decreasing the par value does not impact the shareholders' ownership percentage; instead, it adjusts the nominal value associated with each share. 2. Increase of Common Stock Par Value: Conversely, an increase in the par value of common stock involves raising the minimum selling price of shares. Corporations might opt for increasing the par value to enhance the perceived worth of their stock, attract more substantial investments, or align the par value with the overall growth and financial health of the company. Similar to a decrease, an increase in par value does not affect shareholders' ownership stakes; it merely alters the face value attributed to each share. Before implementing any changes to the par value, the corporation must follow the legal procedures outlined by the Rhode Island Secretary of State or any relevant governing bodies. The corporation must prepare an amendment document stating the intended change, including the specific stockholders' resolution supporting the amendment. This document is then filed with the Rhode Island Secretary of State, along with the necessary fees, to obtain approval and make the amendment legally binding. Overall, the Rhode Island Amendment of Common Stock Par Value offers corporations flexibility in managing their capital structure. Whether decreasing or increasing the par value, corporations can adjust their stock's nominal worth according to their strategic goals, market conditions, and shareholder expectations.