Are you studying for an exam, Bwlf? Your questions seem to indicate that.I'm searching the Utah Code and the Division of Corporations site and I can't find anything about if no par value stock is allowed in Utah.
Can anyone direct me to any relevant statute or guidance on the legality of no par value stock in Utah?
I'm not in school. Don't intend to ever be a lawyer. I'm on this forum for help understanding a few issues.Are you studying for an exam, Bwlf? Your questions seem to indicate that.
In case this is homework, instead of providing a link I will direct you to Title 16 of the Utah Code.
Thanks for the reply.You need to actually READ the entire sentence in the regulation. The part you are quoting says
Section (1) states that what the articles of incorporation SHALL (this means what is REQUIRED) to state.
Section (2), what you're reading, states what the articles of incorporation MAY (allowed to, but not required) state
Issuance of shares is pretty much covered in section 601. They are required to have stated things like voting rights and dissouliton rights but I see nothing requiring declaraing a par value.
As alluded, there are only very specific times when a par value ever means anything. Mostly it's an accounting thing at the time of issuance. It's usually however, just a de minimis valuation. Some states vary the filing fee based on the number and par value of shares. Utah does not.
But to answer the question, Utah allows creating of a corporation without stating a par value on the stock.
In fact, when you create the corporation online, you declare the type and number of shares and there's not even a place to enter PAR value.
Well, that is not entirely true. It depends on the type of corporation.Thanks for the reply.
So it seems that nowhere in Utah statutes does it prohibit a corporation from declaring it's stock to have no par value in the Articles of Incorporation as follows:
"The corporation is authorized to issue a single class of <insert number of shares> of Common Stock, no par value, which shall exercise all voting rights and shall be entitled to receive the net assets of the corporation upon dissolution."
Can you clarify your answer?Well, that is not entirely true. It depends on the type of corporation.
Thanks for clearing that up.In your statement above, you say that Utah statutes do not prohibit a corporation from declaring its stock to have no par value - but, for one example, pure captive or sponsored captive insurance companies incorporated as stock insurers cannot issue stock at less than par value.
This probably doesn't apply to you or your concerns )), but there are exceptions to your statement that I thought I would point out.