issuance of stock

Question 1

par value

Answer 1

minimum issuance price for stock. any valid consideration may be received, so long as it is valued at least at par value

Question 2

no par

Answer 2

no minimum issuance price, so any valid consideration deemed adequate will suffice

Question 3

treasury stock

Answer 3

stock previously issued that has been reacquired by corp. if sold again, it is no par stock.

Question 4

consequences of issuing par stock for less than par value

Answer 4

directors are personally liable for authorizing a below par issuance and purchasing shareholder is liable for full consideration - at least par value

Question 5

preemptive rights

Answer 5

right of existing shareholder to maintain percentage of ownership by buying stock whenever there is a new issuance of stock for cash. so if someone owns 20% of outstanding stock and corporation issues more stock, have right to purchase newly issued stock to maintain 20% ownership

only exist if granted in articles of incorporation