Common Stock Without Par Value

State:
Multi-State
Control #:
US-CC-3-215A
Format:
Word; 
Rich Text
Instant download

Description

The document addresses the proposal to amend the Articles of Incorporation of the Bank of Granite Corporation by reducing the par value of its common stock from $5.00 to $1.00 per share. This amendment aims to enhance the corporation's flexibility in declaring stock splits and issuing stock dividends, which are limited by the current high par value. Par value, historically significant, now mainly serves regulatory purposes, representing a nominal value of stockholder interest without necessarily reflecting market value. The Board of Directors recommends this change to facilitate future capital management, as it is not expected to impact the overall shareholder equity. It is crucial for individuals working in legal and financial sectors—such as attorneys, partners, owners, associates, paralegals, and legal assistants—to understand the implications of par value on stock transactions and corporate governance. Proper completion of this amendment form is essential to ensure compliance with state corporation law and to support future corporate actions effectively.
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FAQ

The presentation of common stock without par value usually appears in the equity section of a company's balance sheet as 'Common Stock'. It reflects the total amount received from stock issuance, without assigning a par value. This clear presentation ensures that investors and stakeholders understand the company's equity structure and financial health.

Rule 4.2 of the Rules of Professional Conduct provides that ?[i]n representing a client, a lawyer shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law ...

Regulatory Scheme: Connecticut Rule of Professional Conduct 7.4A permits attorneys to state or imply that they are certified specialists where certification is granted "by a board or other entity which is approved by the Rules Committee of the Superior Court." [Rule 7.4A].

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Rule 7.1. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.

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Common Stock Without Par Value