Authorizing Stock and Setting Par Value
Written March 1, 2016
Par value is the minimum price that a corporation can issue its shares for. The concept originated in the great depression. Startups should keep their par value low
- so that founders don't have to invest a significant amount of cash to gain equity in their company; and
- to keep their Delaware franchise tax bill low.
As a part of incorporation, you'll determine how many shares to authorize and set par value.
We typically recommend that a startup authorize 10 million shares and set par value for common stock at $0.00001.
make sure your new venture is legally sound
Because D.I.Y. won’t C.Y.A.
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