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Ask a Lawyer -- Corporations
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Brought to you by MedLawPlus.com®-- Corporate Bylaws and initial board of directors resolution Price: $14.99 (free trial) |
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Question: How does a C corp go about issuing an additional 9,900 shares of stock with a par value of $10 each, added to its original issue of 100 shares @ $1.00 a share ? Is a corporate resolution enough or does the state have to be notified ? Response: That depends. Check the articles of incorporation to see what were the total authorized shares for the corporation at incorporation. If the total outstanding shares are 9,900 less than the total authorized shares, then your corporation may issue more shares in the manner allowed in the bylaws (usually a vote of the directors). If there are not 9,900 authorized but unissued shares, I think you need to file an amendment of the articles of incorporation with the state. A shareholder vote is most likely also necessary. One more point. You may be confused on the term "par value". This number is set in the articles of incorporation and is often zero or $1. It has no relation to the original issue price of the shares other than the fact that shares cannot be sold for below par. So I assume, based on your question, the par value at origin issue was at least $1. To my knowledge, directors cannot change par value. An amendment of the articles of incorporation is necessary to do that. So I'm confused by the $10 par value statement in the above question. Submitted: 03/04/2008; Karen, Florida Response: 03/06/2008; JJR Add A Comment |
Ask a Lawyer, Corporations Archives
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