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.