Startup equity basics

Par value has no relationship to the market value of a stock. The original purpose of this requirement was to protect creditors by specifying a permanent amount of capital (called legal capital)that owners could not withdraw before a bankruptcy which would leave creditors with an empty shell.

Sales of the same class of stock made at or about the same time must be at the same price or the party purchasing at the lower price may have to recognize income on the difference.

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