WHAT IS THE DIFFERENCE BETWEEN “PAR VALUE” AND “NO PAR VALUE” STOCK?
Par value stock certificates carry a stated value on their face. It is the monetary value assigned to each share of stock in the charter of the corporation. In Delaware, par value stock may be issued only in return for “considerations” such as money, property or services of value at least equal to the value of the shares issued. If the purchase of the shares is with cash, the transaction is simple. If par value shares are purchased with property, the value of the property must be established by an independent licensed appraiser. And the value of the shares exchanged for the property may not exceed the dollar amount of the appraisal. If the par value shares are exchanged in return for services, such services must already have been performed, and they must be valued at the going rate for such services. The service provider must then treat such value as service income.
45.1 Par Value stock certificates carry a stated value on their face. It is the monetary value assigned to each share of stock in the charter of the corporation. 45.2 In Delaware, par value stock may be issued only in return for considerations such as money, property or services of value at least equal to the value of the shares issued. If the purchase of the shares is with cash, the transaction is simple. 45.3 If par value shares are purchased with property, the value of the property must be established by an independent licensed appraiser. And the value of the shares exchanged for the property may not exceed the dollar amount of the appraisal. 45.4 If the par value shares are exchanged in return for services, such services must already have been performed, and they must be valued at the going rate for such services. Such value must then be treated as service income by the service provider. 45.5 No Par Value stock has no stated value in the corporate charter. Such shares may be sold f
