When a corporation issues no par value stock, the entire consideration received constitutes stated capital unless the board of directors allocates a portion of the consideration to capital surplus.

Question

Quizplus · Accepted Answer

When no par value stock is issued, the entire amount received is considered stated capital unless the board of directors chooses to allocate a portion of the consideration to capital surplus. This is in accordance with generally accepted accounting principles (GAAP) and the Model Business Corporation Act (MBCA).

When a Corporation Issues No Par Value Stock, the Entire