What happens if no-par stock is issued without a stated value?

Answer 1

If no-par stock is issued without a stated value, it means there is no minimum price set at which the stock can be issued. This can lead to potential complications in determining the legal capital of the corporation, as there is no predetermined value to allocate to the paid-in capital account. Additionally, it may create issues regarding shareholder equity and may affect the company’s ability to pay dividends, as there's no clear measure of the stock's value for these purposes. Overall, it can complicate financial reporting and shareholder rights.