What is the difference between par value and non-par value stock?

The word par means established value. So par value stock
is stock with an arbitrary or nominal value established by the
incorporators of the company. In past times, par value represented
the selling price of shares. Now it has little significance and is not
commonly used.

Non-par value stock is stock that has no stated
value. The shares are issued for consideration or value as
determined by the board of directors. The value of non-par value
stock generally changes or fluctuates with the value of the company.
One of the required parts of the initial articles of incorporation is a
description of the corporation’s authorized stock and whether it is
par, non-par value stock and/or preferred stock.

Author: Robert Montgomery

Attorney Robert Montgomery has been counseling and incorporating businesses for more than 20 years. During that time, he's helped set up more than a 1000 corporations and limited liability companies (LLC's). He's a business owner himself and has been corporate legal counsel for numerous small business corporations. He's presented lectures and seminars on the benefits and procedures involved with incorporating or forming LLC's and how to operate them for maximum benefit. View all posts by Robert Montgomery

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