What is par value?

First Posted: June 16, 2010 3:12 PM  |  Updated: June 16, 2010 3:12 PM

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What is par value?
mashed-report-blog By  Yoichiro (“Yokum”) Taku

Corporate & Securities Partner at Wilson Sonsini Goodrich & Rosati

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Par value is the minimum price per share that shares must be issued for in order to be fully paid. I typically recommend that par value be set at $0.001 or $0.0001 per share.  Thus, if a founder purchases 8,000,000 shares of common stock, the minimum price that the founder has to pay is $8,000 at $0.001 per share or $800 at $0.0001 per share.  Par value can even be set lower, such as $0.00001 per share, in order to minimize the amount paid for founders.  Some states, like California, allow for no par value shares.

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