No-Par Stock

No-Par Stock in United States

Practical Information

Note: Some of this information was last updated in 1982

Stock without any nominal or designated value in money. Such stock may be either common stock (in U.S. law) or preferred stock (in U.S. law). It was originally considered necessary for the certificate (in U.S. law) of Stock to show the amount in dollars for which the stock was issued, whether that amount was actually received by the corporation (in U.S. law) or not. See par value stock (in U.S. law). The actual value of the stock might change from day to day, but the value stated in the stock certificate, the nominal or par value, always remained the same. Thus rather than being a statement of the actual or book value of the stock evidenced by the stock certificate, the statement of par value in the certificate was more often than not no indication at all of the actual or book value of the stock. This fact, in large measure, accounts for the substitution of no-par stock for stock expressing a par value. No-par stock tends to relieve the necessity for, or embarrassment of, explanation of discrepancy between the book or market value and the face value of corporate stocks.

(Revised by Ann De Vries)

What is No-Par Stock?

For a meaning of it, read No-Par Stock in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to No-Par Stock.


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