Common Stock Par Value Formula

• Category: Corporations - Public - Changes Affecting Capital Stock
• State: Multi-State
• Control #: US-CC-3-215A
• Format: Word; Rich Text

Description

The document outlines a 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 per share to $1.00 per share. The change is intended to enhance the corporation's flexibility in issuing stock dividends and conducting stock splits without breaching state corporation laws. The par value is presented as a nominal value that reflects stockholders' interests in the shares, and current practices indicate that it carries minimal significance aside from legal compliance. The document explains the distinction between the Capital Account, which reflects shares outstanding multiplied by par value, and the Surplus Account, representing assets exceeding liabilities. It emphasizes that the proposed adjustment will not alter the corporation's Total Shareholder's Equity or the actual value of shares. Utility of this document extends to diverse legal professionals, including attorneys and paralegals, who may facilitate or advise on corporate governance matters. Partners and owners benefit from understanding procedural requirements and the implications of capital adjustments, while legal assistants may assist in paperwork and compliance. Overall, the document serves as a formal request for stockholder approval of a strategic financial decision to optimize corporate operations.