What is Par Value and No-Par Value Stock?
Par value is simply an accounting or bookkeeping unit of measure used to keep track of the amounts given to the corporation when stock is issued. Par value means much the same as purchase price. If the stock has a $1000 par value, then the person wishing to purchase the stock must give something with at least a $1000 value for the stock. Amounts given for the stock in excess of par value are called “paid in capital in excess of par value” and again is simply a bookkeeping title. Par value is only meaningful when the stock is bought directly from the corporation and is not considered when stock is bought on the open market. No par value stock is stock for which no fixed price is set. This is usually the case in small corporations where the owners issue themselves a number of shares and simply infuse money in the corporation when needed.
(back to top) Par value is simply an accounting or bookkeeping unit of measure used to keep track of the amounts given to the corporation when stock is issued. Par value means much the same as purchase price. If the stock has a $1000 par value, then the person wishing to purchase the stock must give something with at least a $1000 value for the stock. Amounts given for the stock in excess of par value are called “paid in capital in excess of par value” and again is simply a bookkeeping title. Par value is only meaningful when the stock is bought directly from the corporation and is not considered when stock is bought on the open market. When one buys stock on the market, they pay what the stock is actually worth, the “market” price. No par value stock is stock for which no fixed price is set. This is usually the case in small corporations where the owners issue themselves a number of shares and simply infuse money in the corporation when needed. Corporations issue no par stock for flex
