Issuance of Stock Flashcards
1
Q
Two Issuance of Stock Issues
A
- ) Consideration
2. ) Preemptive Rights
2
Q
Consideration
A
The value received in exchange for the stock
3
Q
Preemptive Rights
A
Right of current shareholder to purchase additional shares before outsiders are permitted to purchase in order to maintain their pre-issuance ownership %
4
Q
Are preemptive rights presumed?
A
No. They do not exist outside express authorization in the articles of incorporation
5
Q
Par Value
A
The minimum price for stock
6
Q
No Par Stock
A
Adequate consideration is determined by the BOD
7
Q
Treasury Stock
A
Deemed no par stock, adequate consideration determined by BOD
8
Q
Who is liable for authorizing below par stock?
A
Directors are personally liable
Buyer of stock is personally liable if full consideration not paid
