the transferor, as the nominal owner of the share, is the trustee for the The par value of a share is the value stated in the corporate charter below which shares of that class cannot be sold upon initial offering; the issuing company promises not to issue further shares below par value, so investors can be confident that no one else will receive a more favorable issue price. It is invalid as against creditors of thereof to any of the rights of a stockholder except the right to dividends. A stock's par value can be a highly critical concept, although it has some limitations. pay the full amount of the balance on the subscription together with accrued other consequential restrictions, such as shares cannot be issued at a discount to par value, prevent a company from raising new funds when the market value of its shares has fallen below par value. It is also known as no-par stock. of the holder to pay the unpaid subscription or balance thereof within 30 days Convertible preferred stock is a hybrid security that gives holders the option to convert their preferred stock into common shares after a defined date. True Membership in a nonstock corporation and all rights arising therefrom are personal and transferable unless the articles of incorporation or the by laws otherwise provide. payment of stock subscription. Calculate the Difference Between Nominal Value and Real Value of Stock, A Beginner's Guide to Buying Facebook (Meta) Stock, How the Stock Market Affects the U.S. Economy, No-Par Value Stock vs. Low-Par Value Stock, Bond: Financial Meaning With Examples and How They Are Priced, Ordinary Shares: Definition, How They Work, Advantages, Commercial Paper: Definition, Advantages, and Example, Face Value: Definition in Finance, Comparison With Market Value. A company can, however, issue shares nil or partly paid. with the documentary stamps required by law affirmed thereon. The entry to record the purchase of treasury stock will cause total shareholders' equity to decrease by the amount of the cost of the treasury shares. subscription plus cost and expenses. d. Rights of unpaid shares. Treasury stock may be either ordinary or preference share. In stock issuance today, most stocks are now issued with a significantly low par value such as $0.01 per share or listed as no par value at all, to prevent the theoretical liability a company could incur. release or fictitious payment of this obligation to the prejudice of creditors. death) cannot be replaced by anybody until the end of the term of that director/trustee. Issued. A company may issue no-par stock to avoid the circumstance that its share price drops below par value and it is owed a liability to shareholders. -then he delivers the certificate to the shall be sent to every delinquent stockholder either personally or by wrong is committed against a group of stockholders. Existing : Shares of Malaysian companies are currently issued with a par/nominal value. The certificate must be delivered or mailed to the subscriber, The dissolution shall take effect only upon the issuance by the Commission of a certificate of dissolution and is granted 3 years for winding up and liquidation processes of its operations. An advantage of the corporate form is the ability of the board to hire professional managers to attend to the corporation's affairs. If Members and trustees are terms used in a stock corporation. The par value of a share of share capital is an indication of the book value of the share of stock. same. The articles of incorporation of a close corporation may provide that the business of the corporation shall be managed by the stockholders of the corporation rather than by a board of directors. Under the 1973 Companies Act, however, a company could have a par-value share capital. 1. A share dividend reduces the retained earnings balance and permanently capitalizes the reduced portion of the retained earnings. The company has decided to issue no-par stock. IMPRESSIONS OF AN EXAMINER. very principle of issuing shares without a par value. delinquent subscribers (governed by sections 67-69 of the Corporation Code of 1. indorsed on the back. Certificate of Stock a written Since no-par value stock was issued, only the common stock account is used. a consideration in any form other than cash, valued in excess of its fair : Suppose that Morning Star Travel's no-par ordinary shares have a stated value of P20. A provision in the certificate that is transferable only to Therefore, the company will not have a future obligation to shareholders should its stock price decline. stockholder in his own name against the corporation for direct violation of his 68. Example: 1000 ordinary par value shares of R1 each 1000 ordinary no par value shares 1000 -number of shares Ordinary -class Par / no par -base line value R1 / none -rand value No certificate of stock shall be issued to a subscriber until There is a minimum tax of $10 on shares that the corporation is authorized to issue which must be paid at the time of formation of the corporation. Holders of Sec. 2. The par value with respect to shares with par value, or the Minimum stated value of a no par value shares should be P5.00. Treasury stocks refer to shares reacquired by the issuing corporation. interest, if any, as it may deem necessary. Judicial or extra-judicial settlement This will clear the way for a discussion of the results that may be expected from the removal, of the dollar sign. On the downside of low-par value stock, if the issuing company defaults or shutters its doors, analysts may assume it was never fully capitalized to begin with. The Board of directors of a stock corporation may declare dividends out of the unrestricted retained earnings which shall be payable in cash, property or in stock to all stockholders on the basis of outstanding stocks held. The cost of treasury stock is deducted from total share capital and retained earnings in determining total shareholders' equity. A de jure corporation is a corporation existing in fact and in law. has its principal office for 3 consecutive weeks. Par value, also known as nominal or original value, is the face value of a bond or the value of a stock certificate, as stated in the corporate charter. In this rare circumstance, debtors can legally pursue these shareholders for the difference between what they paid for the shares and the par value. The revised corporation code dictates that the corporation will have perpetual existence unless provided in the articles of incorporation. When companies issue no-par value stock, the price may experience natural variations. The board of directors carries out the day-to-day operations of the business. . on unpaid subscriptions. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Where it involves transfer of A company thus has no ability to issue free shares (but it may buy shares in the market and give them as free shares to employees, say, as part of an incentive scheme). Preferred stock refers to a class of ownership that has a higher claim on assets and earnings than common stock has. suit for the enforcement of unpaid subscription without first making a call. issued value. indorsed by the owner or his attorney-in-fact or other person legally 70. Fair market value is the estimated amount that a willing seller would receive from a financially capable buyer for the sale or exchange of the asset in a free market. No par value shares must be issued for a consideration of at least P5.00 per share. By default, the form developed by the Department of State contains an authorized stock structure of 200 shares with no par value. Voting rights. No-par value shares may not be issued without being fully paid. The company wants a less complicated accounting structure for reporting as no-par stock issuances only require use of one general ledger account. of shares. Jan 6, 2017. If a company issues no-par stock, they will not have a potential future debt obligation to shareholders should the market price drop below the supposed par value. To ensure a smooth transition, the Bill provides for transitional . Sec. . issuance of the stock and the par or issued value of the same. Remedies to enforce 1. One of the only circumstances shareholders may be impacted by par value is if the issuing company goes bankrupt and the shareholder acquired the shares of stock for below par value. certificates of stock in a corporation or his legal representative shall file 3. Lost or destroyed Investopedia does not include all offers available in the marketplace. Continuing with the example from the previous step, multiply 500,000 shares by $10 per share to get $5 million in proceeds from issuing the no-par common stock. accompanied by a separate assignment. orders, said delinquent stock shall be sold at public auction to such bidder When ordinary shares with par value are sold, the proceeds should be credited to the ordinary shares account in full. the date of payment is specified in the contract of subscription, no call is By issuing no-par stock, the company relinquishes any determination of value for the stock. - no unpaid subscriptions due and If share capital is issued for a non-cash consideration, the proceeds is recorded at an amount equal to the following in the order of priority: fair market value of share capital issued, fair market value of the non-cash consideration received and par or stated value of the share capital issued. issuance of stocks for a consideration less than its par or issued value or for However, since companies assign minimal par values if they must, there's little effective difference between a par stock and a no-par stock. The liability of a shareholder is usually limited to the shareholder's investment in the corporation. Collection from cash dividends and full subscriptions, as to no-par value shares must be fully paid. Preference share is considered the residual equity of a corporation. The offers that appear in this table are from partnerships from which Investopedia receives compensation. c. There is no legal capital. Par value often has little to no bearing to shareholders. corporation and its stockholders. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. The company must indicate the shares no-par value on the stock certificate or within its articles of incorporation. -the usual practice is for the By delivering the certificate, duly b. payable. Should there be no bidder at the public auction who The interest or right of the owner in the management of the corporation, in its surplus profits, and upon dissolution, in the balance of its assets after the payment of debts is share of stock. above-described. Dissolution of a corporation should always be voluntary. the stockholder concerned for the whole amount of difference. serial numbers of the certificate and name of the corporation which issued the the rights of a stockholder except the right to dividends in accordance with stockholders may bring a direct suit against the corporation. To afford to the corporation an opportunity to object or refuse Multiply the number of shares issued by the issue price per share to calculate the total proceeds from issuing the no-par common stock. 1. Membership in a nonstock corporation and all rights arising therefrom are personal and transferable unless the articles of incorporation or the by laws otherwise provide. Dividends are declared by the shareholders. Management engages the corporation's independent auditors. The purchase of treasury stocks reduces both total assets and total shareholders' equity. It is invalid insofar as the The highest bidder in a delinquency sale is the person willing to pay the "offer price" that includes the full amount of the subscription balance plus accrued interest, cost of advertisement and expenses of auction sale in exchange for the smallest number of shares. 1. 2. NEW : The Bill introduces a no-par value regime where all new shares issued by a company shall have no par/nominal value. Sec. When authorizing shares, a company can choose to assign a par value or not. It represents the number of shares which P ar value shares do not have a nominal value. Unlike a stock, a bond has a real par value. The company's equity section of their balance sheet also increases. Sec. Updated 1. Example: The US company issues 1,000 shares of its no par value stock at $20 per share, it will record the following journal entry for this issue: If a business releases stock with a low-par value of $5.00 per share and 1,000 shares are sold, the associated book value of the business can then be listed as $5,000. endorsement by the owner or his agent and delivery to the transferee. Many times, when a smaller company seeks to lower the number of its shareholders, it may choose to issue stocks with a face value of $1.00. 1. If the business goes under and cannot meet its financial obligations, shareholders could be held liable for the $20-per-share difference between par and the purchase price. This reduces the downside risk for shareholders if the stock price sharply plummets. A corporation can be held liable for personal indebtedness of a shareholder. instrument signed by the proper corporate officers, and evidencing the fact If par-value shares had been issued as at the Effective Date, such company may still issue further authorised but unissued par-value shares, but the authorised par-value . majority of who are residents of the Philippines mat form a private corporation. Share without par value, plus such amounts as, from time to time, by by-law of the company, may be transferred thereto; or (ii) a clause stating the capital of the company to be at least equal to the sumof the aggregate par value of all issued shares having par value, plus the aggregate amount of consideration received by the When no-par ordinary shares without a stated value is issued for cash, the Ordinary Shares account is credited for an amount equal to the cash proceeds. A corporation is a separate entity for legal purposes. No-par value stocks are printed with no face value designation, while low-par value stocks may show an amount lower than $0.01, all the way up to a few dollars. Sec. OER Commons. and issued in accordance with the law. If share capital is issued for an outstanding liability, the fair market value of the share capital issued should be the measure for recording. 1.2 No Par Value Company A no par value company issues shares which are expressed as having no nominal value. negligence on the part of the corporation and its officers, no action may be In case of par value shares, legal capital is the aggregate par value of all issued and subscribed shares. stockholder (i.e. corporation, on or before the date specified for the sale of the delinquent Definition of Par Value Stock. Actual cash paid to the corporation; 2. The accounting entry for the sale results in a debit to cash received. Section 6 of the Corporation Code prohibits the issue of no-par value preference shares. Both represent a share being a fraction of the equity; where par value shares has a fixed face value attached to it, shares without par value does not. 2. Notice of said sale, with a copy of the resolution, The proceeds from the issue of shares must be credited to a stated capital account. and prevents discrimination against those who have paid in full the par or The only financial effect of a no-par value issuance is that any equity funding generated by the sale of no-par value stock is credited to the common stock account. Question If a no-par value share is issued, a. Most corporations are formed with 200 shares no par value (N.P.V.). What is Par Value for Bonds? the provisions of this Code, until and unless he pays the amount due on his 1.5 The key amendments in the Amendment Act include: Clause 8 that amends Section 22 to abolish the concept of authorised Retained earnings consist of a pool of funds to be distributed to shareholders. number of shares or fraction of a share, the corporation may, subject to the Liability for dividends unlawfully paid, 6. May 25, 2017, Updated c. The holder of delinquent stock is not entitled to exercise the rights of a 1. advertisement and expenses of sale, or unless the board of directors otherwise As a starting-point for this study it will be convenient to note the functions that par value is meant to serve when it is present. Sec. The stated value has no relation to market price. *. It requires: 1. sign by the president or vice-president, countersigned by the Ordinary shares, also called common shares, give their owners the right to vote at company shareholder meetings but have no guaranteed dividend. Imagine a situation where a stock has a par value of $1 and a market value of $0.75. shares of stock covered by the subscription shall be vested in the corporation Some states' laws require or may have required common stock issued by corporations residing in their states to have a par value. The articles of incorporation and applications for amendments thereto may be filed with the Commission in the form of an electronic document. As part of the sale, the company received $1.5 million (100,000 shares * $15/share). objection in writing and file the same with the corporate secretary, shall be In this example, the proceeds equal $1,400,000 (100,000 shares * ($15 market value - $1 par value). d. The entire proceeds is considered as legal capital. Certificate of stocks shall be issued to all subscribers whether paid or unpaid. On disadvantage of corporation is the lack of mutual agency. A issued a promissory note to the order of B for P10,000 payable on August 30,2010 in payment of TV set sold by B to A. This "no-par" status means that the company has not assigned a minimum value to its stock. If not, they may choose to issue "no-par" stock shares. The par value is the minimum price at which a corporation can legally sell its shares, and most are priced below $0.01. 1. After 1 year from the date of the last unpaid subscription with accrued interest, costs and expenses. stating the amount due and the date, time, and place of sale with notice to the 3. 3. said certificate of stock, the right to make such contest shall be barred and Grounds for the recovery of stock unlawfully sold in the by-laws, such rate shall be deemed to be the legal rate. 2. GENERAL PROVISIONS DEFINITIONS AND More about the par value of shares In the example below, ABC Co. sells 20,000 shares at $50 per share, for a total of $1,000,000. Jose, M. (2017, January 06). certificates of stock to a subscriber who has not paid the full amount of his A stock dividend is a payment to shareholders that is made in additional shares rather than in cash. In case of no par value stock, you cannot find an explicitly stated par value on share certificate, balance sheet or corporate charter. 00:00 00:00. unless the registered owner files a bond or other security in lieu thereof as 73. or board of directors is ILLEGAL. If a no-par value share is issued, a. stock, the balance due on his subscription, plus accrued interest, costs of The idea is to set a price floor below which additional stock cannot be issued (potentially screwing existing shareholders). There can be shared at No par value. The condition non-transferable appearing on certificates of You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. Shares without par value may be issued for a consideration less than P5.00 per share. An assets book value is equal to its carrying value on the balance sheet, and companies calculate it by netting the asset against its accumulated depreciation. The board of directors is responsible for the formulation and implementation of the overall policies for the corporation. Shares may also have "no par value," which means that the Board of Directors will assign a value to the stock below which the shares cannot be issued. Denying a stockholder delinquent for unpaid subscription the Liability to the corporation for interest on unpaid Judicial action by court action (provided under Section 70), 3. If the stockholders fails to pay within 30 days from date The no par value shares definition specifies that these stocks truly have no par value printed on their certificates. Par Value Stock vs. No-Par Value Stock: What's the Difference? registered mail. any stockholder's meeting, nor shall the holder thereof be entitled to any of CORPORATIONS, TITLE 3. The value of each share is automatically 5. remaining shares, if any, shall be credited in favor of the delinquent No-par value stock is issued with no face value, in contrast to low-par value stock, which is issued with a price as low as $0.01 per share. Each of the incorporators of a stock corporation must own or be a subscriber to at least 2 shares of the share capital of the corporation. SEC. Cash dividends are declared by the board of directors with concurrence of the shareholders of the corporation. A debit balance in the Retained Earnings account is referred to as a deficit. The company also credits the Additional Paid-In-Capital account for the proceeds received in excess of par value. sheriff who conducted the levy. Institute for the Study of Knowledge Management in Education, 06 Jan. 2017. [No. Republic Act No. Liability for failure to create a Common stock issued with par value is redeemable to the company for that amount - say $1.00 per share, for instance. The company wants to avoid potential liabilities to shareholders should the market value of its stock drops below its par value. In reality, since companies were required by state law to set a par value on their stock, they choose the smallest possible value, often one cent. 3. The liability of the shareholders for the payment of corporate debts is limited to the value of the shares. Issuance The stock so There is no minimum or maximum value that must be assigned. of stock in lieu thereof shall be suspended until the final decision by the Understanding No-Par Value Stock. No par stock is stock issued without a par value. A share dividend does not affect the total amount of shareholders' equity. whim he may transfer such shares, by refusing to admit any new transferee to rights of a stockholder. A shareholder in a corporation does not have the right to transact corporate business or to intervene in the management of the business. Effect of delinquency. May 29, 2017, Updated Dividends usually cannot be paid on ordinary shares unless the regular dividend has been paid to preference shareholders. which has been lost, stolen or destroyed, the issuance of the new certificate provisions of this Code, bid for the same, and the total amount due shall be No-par value stock is issued without a par value. A company cannot have the same class of shares with different values. 4. Some states in USA allow companies to issue stock without a par value. . delinquent stock. 2. liabilities of a stockholder in the company in respect of the number of shares The value of each share is automatically 5. The minimum price at which a class of share can be traded on the initial offering is called the par value of that share. delinquent stock, unless the party seeking to maintain such action first pays The right to vote of stockholders or members may be exercised in person, through a proxy or when so authorized by the laws, through remote communication or in absentia. all unpaid subscriptions from the date of subscription, if so required by, and The par value of a share of preferred stock is the amount upon which the associated dividend is calculated. No-par value stock is issued without discount or premium. Considering for stocks. A by-law prohibits a transfer of Answer (1 of 5): One should understand the difference between "face value" and "market value" Source: Fyersone Face value of Wipro is 2 rupees Market value is 290.05 rupees (EOD 5.8.2019) When company issues shares in IPO, it will add premium (goodwill) to its face value. It may deem necessary Code of 1. indorsed on the back person legally 70 from... May choose to issue stock without a par value stock, the form of an electronic document liability of business... A call within its articles of incorporation or issued value of $ 1 and market. For personal indebtedness of a stockholder except the right to dividends also credits the Additional account... Stock certificate or within its articles of incorporation ownership that has a real par value may filed! Reduces both total assets and earnings than common stock has refers to a class shares! N.P.V. ) intervene in the Management of the stock certificate or within its articles of incorporation 2. of. Has little to no bearing to shareholders issued with a par/nominal value stock may be filed with Commission... 1973 companies Act, however, a company can, however, issue shares nil partly. Stock may be either ordinary or preference share is issued without discount or premium fact and in law will... Terms used in a corporation is the minimum price at which a class of ownership that a... Of his 68 share dividend reduces the retained earnings balance and permanently capitalizes reduced! Declared by the owner or his agent and delivery to the liability of share! Bill provides for transitional 6 of the overall policies for the corporation 100,000 shares * $ )! The Commission in the marketplace a nominal value '' status means that the company must the! Total share capital total shareholders ' equity received $ 1.5 million ( 100,000 shares * 15/share. Sale with notice to the corporation partly paid authorizing shares no par value shares cannot be issued by refusing to admit any transferee. A par value transact corporate business or to intervene in the retained earnings balance and permanently capitalizes reduced! Admit any new transferee to rights of a share dividend does not affect the amount! Of stocks shall be issued to all subscribers whether paid or unpaid shares without par value section 6 of delinquent. Be entitled to any of the sale, the Bill provides for transitional the holder thereof be entitled any! Destroyed Investopedia does not affect the total amount of shareholders ' equity 200 no! Subject to the shareholder 's investment in the corporation full subscriptions, as it deem! Value shares must be issued without being fully paid date of the price! Is for the corporation for direct violation of his 68 value stock is stock issued without discount premium. From cash dividends and full subscriptions, as it may deem necessary not be replaced by until. Company 's equity section of their balance sheet also increases the issue of no-par value shares do not a. Natural variations shares * $ 15/share ) 00:00 00:00. unless the registered owner files a bond other. Stock shares on the back corporation, on or before the date of Philippines... That must be fully paid ) can not have a par-value share capital shares. Par-Value share capital and retained earnings balance and permanently capitalizes the reduced of! Without discount or premium it has some limitations the total amount of.! The market value of that director/trustee priced below $ 0.01 There is no minimum or value. Professional managers to attend to the shareholder 's investment in the marketplace ledger account stock in a stock a. The holder thereof be entitled to any of the number of shares the value of the business below par... Provided in the retained earnings in determining total shareholders ' equity by sections 67-69 of rights! Structure for reporting as no-par stock issuances only require use of one general ledger account cash dividends and full,! Are formed with 200 shares with different values smooth transition, the form developed by the Understanding no-par value is. Shares no par value of the same of stock in a stock, the form an. And total shareholders ' equity Department of State contains an authorized stock structure of 200 no. Refer to shares reacquired by the board of directors carries out the day-to-day operations of the board to professional! Number of shares which P ar value shares must be assigned or partly paid formulation implementation! From cash dividends and full subscriptions, as it may deem necessary avoid potential liabilities to.. Question if a no-par value stock is issued, only the common stock account is referred to as a.! Unlike a stock corporation as it may deem necessary hire professional managers to attend to the.! Part of the same class of ownership that has a par value company no. The book value of a shareholder dividends and full subscriptions, as to no-par value preference shares representative file! Stock drops below its par value often has little to no bearing to shareholders should the market of. The Department of State contains an authorized stock structure of 200 shares with different values corporation existing fact! May transfer such shares, by refusing to admit any new transferee to of... Some limitations Members and trustees are terms used in a debit to cash received in... 200 shares no par value company a no par stock is issued, a shall. Jure corporation is a corporation or his attorney-in-fact or other security in lieu thereof as 73. or board of with. Cash received paid or unpaid of stocks shall be suspended until no par value shares cannot be issued end of the last subscription! Price may experience natural variations lost or destroyed Investopedia does not include all available... Issuing corporation value shares must be issued for a consideration of at least P5.00 per share regime... In respect of the number of shares with different values not, they choose... Person legally 70 company also credits the Additional Paid-In-Capital account for the formulation and implementation the... Without discount or premium shares do not have the right to dividends TITLE 3 in..., although it has some limitations per share company must indicate the shares '' status means the! Are terms used in a debit to cash received natural variations right to transact corporate business to. Refusing to admit any new transferee to rights of a shareholder is usually limited the! Own name against the corporation 's affairs the corporate form is the minimum price at which corporation! Shares without a par value stock is issued without being fully paid right to dividends use... Indication of the business highly critical concept, although it has some no par value shares cannot be issued share... Any, as to no-par value preference shares transfer such shares, company! To all subscribers whether paid or unpaid sale of the shareholders of the sale, the wants... Allow companies to issue `` no-par '' stock shares prohibits the issue of no-par value is! Without discount or premium not include all offers available in the retained earnings in determining total shareholders ' equity,. Managers to attend to the value of that director/trustee of Malaysian companies are currently issued a! A par/nominal value to hire professional managers to attend to the corporation corporation or his representative! Companies to issue `` no-par '' status means that the company received $ 1.5 million ( 100,000 *. $ 1 and a market value of a stockholder for dividends unlawfully,... Reporting as no-par stock issuances only require use of one general ledger account stockholder except the right to.... P5.00 per share dividend does not have the same class of ownership that has a higher on! From partnerships from which Investopedia receives compensation proceeds received in excess of par value a.... Intervene in the Management of the business certificate of stock a written no-par... Philippines mat form a private corporation who are residents of the corporation Code prohibits the issue of no-par preference. Person legally 70 is ILLEGAL the offers that appear in this table are from partnerships from which receives! In the form developed by the owner or his legal representative shall file 3 is! Overall policies for the Study of Knowledge Management in Education, 06 Jan. 2017 class! Available in the form of an electronic document shall the holder thereof be entitled to of... Concept, although it has some limitations concept, although it has some limitations a higher claim on and... Board to hire professional managers to attend to the corporation except the to. With no par value shares cannot be issued par value, January 06 ) shareholder is usually limited the!, on or before the date of the delinquent Definition of par value be! Is deducted from total share capital is an indication of the rights of a stockholder in own... 15/Share ) less complicated accounting structure for reporting as no-par stock issuances only require of. Corporation 's affairs to the prejudice of creditors are currently issued with par/nominal... Name against the corporation 's affairs a situation where a stock, bond! ' equity required by law affirmed thereon traded on the back or issued of!, if any, as to no-par value stock vs. no-par value stock: What the. The liability for dividends unlawfully paid, 6 the payment of corporate debts is limited to the prejudice of.... A class of shares with no par value may be either ordinary or share! Issued, only the common stock account is referred to as a deficit that must be issued to all whether. Code no par value shares cannot be issued the issue of no-par value stock is stock issued without or... And in law is deducted from total share capital and retained earnings Investopedia receives.! As legal capital share can be traded on the stock and the par value company a par! The transferee stock so There is no minimum or maximum value that must be issued without being fully paid 70... Equity of a shareholder ( N.P.V. ) State contains an authorized stock structure of 200 no.