issuance of stock (when corporation SELLS its OWN stock)

Question 1

does consideration need to be given when the CORP sells it own stokc>

Answer 1

YES

Question 2

what is par value

Answer 2

minimum issuance price. C may always receive more but CAN NEVER get less than par value

Question 3

if corp is selling 10k shares for $3 par stock, how much must it receive

Answer 3

at LEAST 30k

Question 4

what if the corp is acquiring property with par value stock>

Answer 4

any valid consideration INCLUDING property can be received if board values consideration in GOOD FAITH to be worth at least par value

Question 5

what must corp do to get property from issuance of stock?

Answer 5

property must be at least worth par value

Question 6

what does “no par” means?

Answer 6

no minimum insurance price. ANY valid consideration can be received if it is deemed adequate by the board

Question 7

what is treausory stock

Answer 7

stock that was previously issued and had been reacquired by the corp. and can be re-sold

Question 8

what is treasury stock considered as

Answer 8

no par stock

Question 9

what are the consequences of issuing par stock for LESS than par value?

Answer 9

can sue either directors OR buyers

- can only recover from 1 though.

Question 10

what are preemptive rights?

Answer 10

right of an EXISTING shareholder to maintain her % of ownership by buying stock w/e there is a NEW ISSUANCE of stock for cash
- buy new issuance of stock to maintain their % of ownership

Question 11

if the articles of incorporation are silent on preemptive rights what is the default rule?

Answer 11

preemptive rights DO NOT exist unless expressly granted in articles of incorp.