2.3.1.e: Note on Par Value

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Abstract

No par value stock should not be used except in very unusual circumstances. This is because no par value stock can increase the corporation's initial incorporation fees and annual franchise tax in Delaware, can result in increased fees when qualifying to do business in other states, and can limit the amounts available for dividends. When incorporating in Delaware, many attorneys now use one hundredth of a cent par ($0.0001) par value. In any event, the attorney should check the methods of computing the Delaware incorporation fee and annual franchise tax so as to minimize those taxes. (See "Note on Corporation versus LLC"). In the case of no par value stock, the initial Directors' resolutions (and any subsequent resolutions issuing no par value stock) should allocate a portion of the consideration received to paid in capital and a portion to capital surplus. If this is...