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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.
Common stock. It is calculated by subtracting retained earnings from total equity. read more at par = par value * number of shares issued.
A stock split-up is a dividing up of outstanding shares into a greater number of share units. It merely reduces the per share value (the par value in the case of par value shares or the stated value in the case of no par value shares) of each outstanding share and increases the total number of shares issued.
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 is the value of a single common share as set by a corporation's charter. It is not typically related to the actual value of the shares. In fact it is often lower. Any stock certificate issued for shares purchased shows the par value.
A change in par value usually occurs when a company's stock is split. The par value is typically listed on stock certificates and usually does not represent the stock's actual value.
The conversion process, in essence, requires a company to amend its Memorandum of Incorporation by a special resolution of its shareholders.