How to Find the Par Value Per Share of a Stock

Par value, often called face value or nominal value, represents a fixed, arbitrary amount assigned to each share of a company’s stock at the time it is initially issued. This value is typically quite low, frequently set at a fraction of a cent, such as $0.01 or even $0.0001 per share. While it might seem like a minor detail, par value holds historical significance in corporate finance and accounting. Individuals might seek this information out of general curiosity, to better understand a company’s financial structure, or for specific accounting and legal contexts.

Understanding Par Value

Par value is an amount assigned to shares, often far below their market price. For instance, a stock might have a par value of $0.0001, yet its market price could be hundreds of dollars. This initial, stated value remains constant and does not fluctuate with the stock’s market price, which is determined by supply and demand, company performance, and broader economic conditions.

Historically, par value helped protect creditors by establishing a minimum capital amount that companies could not distribute to shareholders. This concept was more significant in earlier financial markets when regulatory oversight was less developed. Today, its practical relevance for investors is minimal, as it bears no direct relation to a stock’s intrinsic worth or market valuation.

Today, par value primarily serves accounting and legal compliance. Companies often set a very low par value to avoid limiting the price at which they can issue shares, providing flexibility in capital-raising efforts. This low value also helps minimize potential liabilities or certain state-level franchise taxes that might be based on par value.

Sources for Finding Par Value

Locating a stock’s par value involves reviewing specific corporate documents, as this information is recorded at a company’s inception and during subsequent stock issuances. The most authoritative source for this detail is the company’s foundational legal document, its charter or articles of incorporation. This document, filed with the Secretary of State’s office in the state where the company is incorporated, explicitly declares the par value of its shares. These filings are often publicly accessible through state government websites, though the ease of access can vary.

For publicly traded companies, the par value is reported in their regulatory filings with the U.S. Securities and Exchange Commission (SEC). You can find this information within the company’s annual reports (Form 10-K) or registration statements (Form S-1) filed on the SEC’s EDGAR database. Within these documents, the par value is typically stated in the “Shareholders’ Equity” section of the balance sheet, often alongside the common stock account. It may also be detailed in the footnotes to the financial statements, which provide additional context on capital stock. The EDGAR database is freely available on the SEC’s website, allowing anyone to search for a company’s filings by its name or Central Index Key (CIK) number.

In some cases, particularly for older shares or those of private companies, the par value might be printed directly on the physical stock certificate itself. While this was once a common practice, the widespread adoption of electronic shareholding has made physical certificates less prevalent for modern publicly traded stocks. If public documents are unclear or unavailable, contacting a company’s investor relations department can be a direct way to inquire about its par value, especially for smaller or privately held entities.

Implications of Par Value

Par value maintains specific implications primarily within accounting and legal frameworks. From an accounting perspective, par value is crucial for establishing a company’s “stated capital” or “legal capital” on its balance sheet. When a company issues shares, the portion of the proceeds equal to the par value per share is recorded in the “common stock” account, representing the legal capital.

Any amount received from investors that exceeds the par value is recorded separately in an account called “additional paid-in capital” (APIC) or “contributed capital in excess of par.” For example, if a share with a $0.01 par value sells for $50, $0.01 goes to the common stock account, and $49.99 goes to APIC. This distinction is important for financial reporting, providing transparency on how much capital was raised from the nominal value of shares versus the premium investors paid.

Legally, some states may still require companies to declare a par value upon incorporation, and it can play a minor role in calculating certain state franchise taxes. While many states have moved away from strict par value requirements or allow for “no-par” stock, where a stated value set by the board serves a similar accounting purpose, it still serves as a theoretical minimum price below which shares cannot be initially issued.