BizTerm Definition
Par Value
Short Definition
The minimum value of a share of stock
Full Definition

The 'face value' of each share of stock, assigned by a corporation usually in the articles of incorporation.  It is also the stated minimum value of each share of stock.  So, each share of stock must be sold for no less than this value or the owner of the stock can face potential liability.  With low or no par value stock this issue is minimized or eliminated.  Most states allow "no par value" stock.

Although the par value is often printed on the stock certificate, par value is not the same as the actual 'market value' of the stock, which is usually much more than par.


New Entities

Filing Fees
When figuring the filing fees, some states use a formula of the stock's par value multiplied by the number of shares of stock (i.e Nevada & Delaware). This number equals the company's "share value". If the share value is too high, the state may assess additional filing fees and some with states, additional annual fees. By choosing "no par value," if allowed by the state, or the lowest par value allowed often helps to keep the share value down.

What should you choose?
Most small business corporations choose "No" as their stock's par value, unless their formation state does not allow "no par" stock.

NOTE:  If you are still unsure of the par value you should chose, we recommend that you discuss this with your legal or business advisor.


Existing Entities

Where to Find Your Corp's Par Value
If your corporation has already been formed, in most cases your par value has already been set up and can be easily found on your Articles of Incorporation (AKA Certificate of Incorporation).  This should be listed right next to the amount of Authorized Shares of stock.

If Par Value has NOT been established yet
If your corporation has not established Par Value in the articles of incorporation, then you will need establish the par value.  See "What Should You Choose?" above.

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