how to find par value of common stock guide

Introduction

how to find par value of common stock is a common question for investors, accountants, and founders who want to verify the legal (nominal) amount assigned to a company’s equity. This article shows where par value is set, how to read and calculate it from filings, practical accounting entries, and special cases (no‑par or stated value). You will learn step‑by‑step methods to locate par per share in public records and company documents, troubleshooting tips, and short worked examples you can follow.

As of 2025-12-31, according to Forbes Advisor, many U.S. corporations set par value extremely low (for example $0.01, $0.001, or $0.0001) or issue no‑par common stock to minimize legal capital obligations.

Hitting the key question: how to find par value of common stock — start with the company charter and the equity note in its SEC filings. This guide spells out each step and shows how to compute par value per share when filings do not state it explicitly.

Definition and Purpose

Par value is a nominal or face amount per share that a corporation assigns to its stock at incorporation. Historically, par value represented the minimum price at which shares could be legally issued and protected creditors by preserving a legal capital base. Today par value is largely symbolic for most common stock: companies typically set it very low so it does not constrain financing or create large legal capital balances.

Key points:

• Par value is an accounting/legal attribute, not a market price.
• Par value may be zero (no‑par stock), a small amount (e.g., $0.0001), or a stated value assigned by the board when no par exists.
• Par value can affect legal capital and how equity is presented on the balance sheet.

Par Value vs. Market Value

Do not confuse par value with market value. Market value is the price at which shares trade in the market and fluctuates with supply, demand, and business performance. Par value is fixed by the company’s charter (or by state law) and rarely changes except by amendment, stock split, or reverse split.

Why this matters in practice:

• Investors typically ignore par value when valuing a company.
• Par value appears in legal documents and accounting records and matters for corporate governance and statutory compliance.

Legal and Corporate Basis for Par Value

Par value is usually established in the articles of incorporation (also called the certificate of incorporation or corporate charter). State corporation laws may require that par value be stated; some states allow no‑par stock. The legal capital concept ties par value to the minimum contributed capital that cannot be distributed as dividends in some jurisdictions.

Where par value is set and how it’s treated:

• Articles/certificate of incorporation: the primary legal document that specifies par value per share or declares no‑par stock.
• State law: some states define legal capital rules that use par value to determine distribution limits or creditor protections.
• Board actions and amendments: par value can be changed only through charter amendments or corporate actions required by law.

Remember: many corporations set par value low to avoid legal capital constraints while still satisfying statutory requirements.

Where to Find a Company's Par Value

Primary documentary sources to check when you want to know how to find par value of common stock:

• Articles of incorporation / corporate charter
• SEC filings (Form 10‑K, 10‑Q, S‑1 and prospectuses)
• Company balance sheet and stockholders’ equity notes
• Stock certificates and investor relations (IR) pages
• State filing records (Secretary of State)

Articles of Incorporation / Corporate Charter

The corporate charter often states the par value per share for each class of stock or declares that shares are no‑par. How to obtain it:

• Check the company’s investor relations site for charter or certificate of incorporation documents.
• Search state business registries (Secretary of State) for the filed certificate.
• For many public companies, the charter is attached as an exhibit to the Form 10‑K or S‑1.

If the charter declares no‑par stock, the charter may also specify a stated value or authorize the board to set a stated value.

SEC Filings (Form 10‑K, 10‑Q, S‑1, Prospectuses)

Public companies commonly disclose par value details in their SEC filings. Typical locations:

• The balance sheet heading or the notes to consolidated financial statements that describe stockholders’ equity.
• The ‘‘Common stock’’ line often includes a parenthetical noting par value per share and the number of shares authorized/issued/outstanding.
• Exhibits include the certificate of incorporation showing authorized shares and par value.

Practical tip: open the most recent annual report (Form 10‑K) and search (Ctrl+F) for "par value", "stated value", or "Common stock". You will often find a line such as: "Common stock, $0.0001 par value — 10,000,000,000 shares authorized; 1,200,000,000 shares issued and outstanding."

Company Balance Sheet and Equity Notes

On the consolidated balance sheet or in the stockholders’ equity footnote, you will typically find the par value displayed alongside the number of shares authorized, issued and outstanding. The equity note also explains additional paid‑in capital (the amount received over par) and other components of equity.

Example phrasing in filings:

• "Common stock, $0.01 par value; 500,000,000 shares authorized; 100,000,000 issued and outstanding."
• ‘‘The par value per share is $0.0001; amounts in the accompanying consolidated financial statements are presented in thousands.’’

Stock Certificates and Investor‑Relations Pages

Paper or electronic stock certificates (less common today) may show par value. Investor relations pages occasionally publish charter excerpts or capital structure summaries. These sources are helpful if you want a quick confirmation without searching SEC exhibits.

How to Read Financial Statements to Locate Par Value (Step‑by‑Step)

Follow this concise procedure when determining par value from corporate filings:

1. Obtain the company's most recent Form 10‑K (annual report). If unavailable, use the latest 10‑Q or S‑1 (for newly public companies).
2. Go to the consolidated balance sheet or the Statement of Stockholders’ Equity.
3. Find the line item for "Common stock" and read the parenthetical that usually states par value per share and authorized/issued/outstanding share counts.
4. If the parenthetical doesn’t state par explicitly, read the equity footnote; search for "par value", "stated value", or the certificate of incorporation exhibit.
5. Confirm whether amounts in the filing are presented in dollars or in thousands (note disclosures often say "in thousands").
6. If only aggregate common stock dollars and shares issued are shown, compute par value per share by dividing the reported common stock amount by the number of shares issued (see calculation section below).

This stepwise approach is the most reliable way to answer how to find par value of common stock for a public company.

Calculating Par Value If Not Explicitly Stated

When a filing does not print par value per share but discloses the aggregate amount assigned to common stock (the legal capital portion) and the number of shares issued, you can calculate par per share:

Par value per share = Reported common stock (par amount) ÷ Number of shares issued

Important cautions:

• Confirm whether the reported dollar amounts are shown in thousands (look for a statement like "Amounts in thousands"). If so, multiply the reported number by 1,000 before dividing.
• Use "shares issued" in the calculation, not "shares outstanding", if the filing separates treasury shares; the legal capital portion usually ties to issued shares.
• Different classes of stock may have different par values. Use the class’s reported shares and the class’s aggregate common stock amount.

Example Calculation

Suppose the balance sheet shows:

• Common stock: $5 (in thousands)
• Shares issued: 100,000

If amounts are in thousands, the reported common stock is actually $5,000. Then: Par value per share = $5,000 ÷ 100,000 = $0.05 per share

If the filing displays amounts in full dollars (not in thousands) and shows Common stock $5,000 and 100,000 shares issued, par = $5,000 ÷ 100,000 = $0.05.

Always check the notes to confirm the units used in the statements.

No‑Par Stock and Stated Value

Some corporations issue no‑par stock. In that case, the articles of incorporation may either:

• Explicitly say the shares have no par value, or
• Allow the board to assign a stated value for accounting.

Stated value functions like par in the accounting records: when shares are issued, the stated value per share is credited to common stock and any excess is recorded as additional paid‑in capital. If no stated value exists, the entire consideration received may be recorded in contributed capital accounts as permitted by law and the company’s charter.

How to find stated value:

• Check the certificate of incorporation or the equity footnotes in SEC filings for "stated value" language.
• If no stated value is assigned, the company’s accounting policy note usually explains how proceeds from issuance are allocated.

Accounting Treatment and Journal Entries

Typical journal entry when common stock is issued for cash (par or stated value exists):

• Debit Cash (total proceeds)
• Credit Common Stock (par value per share × number of shares issued)
• Credit Additional Paid‑In Capital (APIC) for the excess (proceeds minus par value)

Example entry:

• Issue 100,000 shares at $10.00 per share; par value = $0.05 per share.
  • Cash (Debit) = $1,000,000
  • Common Stock (Credit) = $0.05 × 100,000 = $5,000
  • Additional Paid‑In Capital (Credit) = $995,000

When no‑par stock with stated value is issued, replace par with stated value in the same format. If no-par and no stated value apply, the entire proceeds may be recorded to common stock or to common stock and APIC depending on accounting policy and jurisdiction.

Practical Considerations and Implications

Why companies set very low par values:

• Minimize legal capital recorded at par, giving the company flexibility to use equity funds for corporate purposes.
• Avoid potential legal restrictions on distributions: a low par reduces the portion of equity locked as legal capital.

Investor implications:

• Par value typically has no effect on market valuation, dividends, or investor returns.
• Par value may be relevant in legal disputes or during charter amendments and reorganizations.

Legal restrictions:

• Some states disallow the issuance of shares below par value. Setting par extremely low helps avoid inadvertent legal issues.

Bitget tip: when reviewing a company’s capital structure, focus on issued and outstanding share counts, additional paid‑in capital, and total shareholders’ equity. Par value is usually a benign legal artifact, but verifying it is essential for accurate equity accounting and for understanding historical capital raises.

Special Cases and Related Securities

Preferred stock

• Preferred stock often carries a par value that may be used to calculate dividends or liquidation preferences. Always check the terms of preferred stock in the charter and the equity notes.

Bonds and other debt

• "Par" or face value for bonds means the principal amount repaid at maturity — a distinct concept from stock par value.

Treasury shares, stock splits, and reverse splits

• Treasury shares reduce outstanding shares but not issued shares. Use issued shares when deriving par value from aggregate legal capital.
• Stock split or reverse split typically adjusts par value per share. For example, a 2‑for‑1 split halves the par value per share (and doubles number of shares). Filings will disclose the post‑split par value.

Multiple share classes

• Companies with multiple classes (Class A, Class B) may assign different par or stated values to each class. Look for class‑specific disclosures in the equity note.

Common Pitfalls and Troubleshooting

Watch for these common issues when you investigate how to find par value of common stock:

• Filings presented in thousands: always check the unit note (e.g., "amounts in thousands").
• Using outstanding vs. issued shares incorrectly: issued shares affect the legal capital calculation; treasury shares are excluded from outstanding but included in issued.
• Aggregated disclosures: some companies aggregate multiple classes under one dollar amount; separate class details are often in the notes or exhibits.
• Multiple par values: check whether the filing lists different par values for different classes.
• Charter amendments or recent corporate actions: a recent stock split or charter amendment can change par per share — read the corporate actions section of the filing.

Troubleshooting steps:

• If the 10‑K does not show par value per share, check the certificate of incorporation (exhibits) or the state filing.
• If the numbers don’t reconcile, confirm whether amounts are in thousands and whether shares issued equal shares outstanding.

Frequently Asked Questions (FAQ)

Q: Can par value be zero? A: Yes. Some corporations issue no‑par stock, which effectively means there is no nominal par per share. Accounting practice then relies on stated value or records proceeds in capital accounts.

Q: Does par value affect market price? A: No. Market price is determined by market forces, not by par value. Par value is a legal/accounting figure.

Q: What to do if par value is not on the 10‑K? A: Search the exhibits for the certificate of incorporation, check the equity notes for stated value language, and check the state secretary of state filings. If the company is private, request the charter through investor relations or counsel.

Q: How does a stock split affect par value? A: A forward split reduces par per share proportionally (e.g., 2‑for‑1 doubles shares and halves par). A reverse split increases par per share proportionally.

Q: Should I use issued or outstanding shares when calculating par per share? A: Use issued shares. Treasury shares are issued but not outstanding and can distort per‑share calculations tied to legal capital.

References and Further Reading

Sources to consult for authoritative guidance and examples when learning how to find par value of common stock:

• SEC filings (Form 10‑K, 10‑Q, S‑1 and related exhibits)
• Company certificates of incorporation or corporate charters (state filings)
• Investopedia — overview of par value, stated value, and no‑par stock
• The Motley Fool — articles explaining par value for investors
• Wall Street Prep — accounting and equity presentation guidance
• Forbes Advisor — practical commentary on par value practices
• Ramp blog and Lumen Learning — beginner explanations of legal capital and par value

These sources provide background, sample filings, and practical tips for locating and calculating par value.

Example Appendix

Example 1 — Simple public company equity note (anonymized): Balance sheet excerpt (note: amounts in thousands):

• Common stock, $0.01 par value; 1,000,000 shares authorized; 200,000 shares issued and outstanding.
• Additional paid‑in capital: $10,000
• Retained earnings: $5,000

Interpretation:

• Par value per share is explicitly stated as $0.01.
• If amounts are shown in thousands and the common stock line reads $2 (meaning $2,000), verify whether the filing presented common stock as $2 because $0.01 × 200,000 = $2,000.

Example 2 — Calculated par per share (anonymized): Equity note shows:

• Common stock: $50 (amounts in thousands)
• Shares issued: 1,000,000

Calculation:

• Reported common stock = $50,000
• Par per share = $50,000 ÷ 1,000,000 = $0.05 per share

Note: Check if the company has multiple classes; allocate the class aggregate amounts to the corresponding share counts.

Editor Notes and Guidance

• When citing a company example, reference the specific SEC exhibit (for example, Form 10‑K, Exhibit 3.1 — Certificate of Incorporation) and the filing date.
• When using arithmetic examples, indicate whether amounts are shown in thousands in the source filings.
• Maintain the distinction between par value, stated value, and legal capital when explaining accounting impacts.

Next Steps and Bitget Recommendations

If you are researching public companies’ capital structures regularly, use these practical steps:

• Save the company’s most recent Form 10‑K and any charter exhibits in one folder for quick reference.
• For private companies, request a copy of the certificate of incorporation from investor relations or counsel.
• When reviewing equity accounting, pay attention to the "Common stock" line, "Additional paid‑in capital," and any notes about units (thousands) or class distinctions.

Want to keep track of company filings and capital changes efficiently? Explore Bitget resources for easy portfolio tracking and documentation management. For secure custody of related digital assets and credentials, consider Bitget Wallet as a recommended option.

Further reading and tools: review the SEC’s EDGAR search for exhibits, consult accounting textbooks for journal entry templates, and read Investopedia or Wall Street Prep for additional worked examples.

More practical suggestions and an extended example set are available on Bitget’s educational platform — check Bitget’s learning hub to deepen your accounting and corporate governance knowledge.

Thank you for reading this comprehensive guide on how to find par value of common stock. If you need a walkthrough for a specific company filing or a step‑by‑step review of a 10‑K, contact investor relations or use Bitget’s platform resources to organize filings and notes.