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Stock

What is the difference between Common Stock and Preferred Stock?

Common Stock is the default voting stock of a corporation. In addition, a corporation may have non-voting common stock and preferred stock.

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September 30, 2009

I am setting up a corporation. How do I decide how many shares of stock to authorize?

In theory, the number is arbitrary. A corporation with three shareholders could have three authorized shares or millions of authorized shares. Typical numbers are 100,000, 1 million and 10 million.

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September 30, 2009

What is the difference between Authorized Shares (stock), Issued Shares and Treasury Stock?

Authorized Shares means the total number of shares of stock the company is authorized to issue by its Articles of Incorporation. In contrast, Issued Shares means the number of shares of stock actually issued by the corporation to shareholders.

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September 30, 2009

What is Par Value? Do I need to assign a par value to my company’s stock?

Par Value is a minimum stock price set by the corporation, such as $0.01 (1 cent) per share. Par Value an archaic concept that is not applicable to California corporations; however, Par Value still exists under Delaware corporate law.

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September 30, 2009