Share Without Par Value

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

Description

The Share Without Par Value form is integral for corporations looking to amend their capital accounts regarding common stock. It allows a corporation, such as Bank of Granite Corporation, to reduce the par value of its common stock from $5.00 to $1.00 per share, thus increasing its flexibility for future capital distributions. This change is necessary due to the limitations state corporation laws impose on stock dividend distributions and stock splits when high par values are maintained. The form outlines the procedure for stockholders to ratify this change, ensuring compliance with state laws. Target users, including attorneys, partners, owners, associates, paralegals, and legal assistants, can utilize this form to facilitate legal adjustments in corporate governance and enhance shareholder equity management. Instructions encourage users to maintain clear documentation, accurately fill in financial details, and communicate effectively with stakeholders about proposed changes. By adopting this form, corporations can navigate legal requirements while aligning their capital structure with strategic financial goals.
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FAQ

No-par value stock is issued without a par value. The value of no-par value stocks is determined by the price investors are willing to pay on the open market. The advantage of no-par value stock is that companies can then issue stock at higher prices in future offerings.

No Par Value Stock Example: If the company decides to assign a ?stated value? to the no-par shares (let's say $1.00 per share), the accounting would be similar to par value stock. In this case (assuming a stated value of $1.00 per share): Common stock (stated value): 1,000 shares * $1/share = $1,000.

Par value, which is also called par, nominal value, or face value, is the amount at which a security is issued or can be redeemed. No-par value stock doesn't have a redeemable price, rather prices are determined by the amount that investors are willing to pay for the stocks on the open market.

The accounting entry for a no-par-value stock will be a debit to the cash account and credit to the common stock account within shareholder's equity.

Par value, which is also called par, nominal value, or face value, is the amount at which a security is issued or can be redeemed. No-par value stock doesn't have a redeemable price, rather prices are determined by the amount that investors are willing to pay for the stocks on the open market.

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Share Without Par Value