October 13, 2026
Par value is the minimum price at which a share can be issued under the company’s charter. It’s a legal floor, not a measure of what the stock is worth. Westaway sets par value at $0.00001 per share, with 10,000,000 authorized shares, so founders can buy their shares for a nominal amount and the Delaware franchise tax stays low. If the founders buy 8,000,000 of those shares at $0.00001, they pay $80 in total. Set par at $0.01 and the same 8,000,000 shares would cost $80,000.
Key takeaways
Par value is a nominal dollar amount per share stated in the certificate of incorporation. Delaware law doesn’t allow a company to issue shares with a par value for less than that amount. It once meant something to creditors, but today it’s mostly a technical floor. Startups set it as low as practical so that the floor never gets in the way. See Certificate of Incorporation.
$0.00001 per share. That’s Westaway’s default for every new Delaware corporation, paired with 10,000,000 authorized shares of common stock, of which 1,000,000 are typically reserved for the option pool. The aggregate par value of all authorized shares is $100. See How Many Shares Should a Startup Company Have?
At formation, founders buy their restricted stock at par value, which is the fair market value of a company that has nothing in it yet. They pay in cash or by assigning the IP they created before incorporating, and then file 83(b) elections. The par value you choose sets the bill.
| Par value | Price for 8,000,000 founder shares | What that means |
|---|---|---|
| $0.00001 | $80 | Founders can pay in cash. This is the Westaway default. |
| $0.0001 | $800 | Workable, but ten times higher for no benefit. |
| $0.01 | $80,000 | Founders can’t realistically pay. Shares can’t be issued below par. |
If founders can’t pay at least par, the company can’t validly issue them the shares. That’s why par needs to be tiny. See Restricted Stock Purchase Agreement and 83(b) Election.
Delaware calculates franchise tax two ways and lets the company pay the lower amount. The default bill uses the authorized shares method, which for 10,000,000 shares produces a frightening number. The assumed par value capital method uses the company’s gross assets, its issued shares and the par value. For an early-stage startup with a low par value, it usually produces the $400 minimum, plus the $50 annual report fee, due March 1. A high par value raises the floor of that calculation and can raise the tax. See Why Does My Startup Owe So Much on Our Delaware Franchise Tax?
Par value is a fixed legal floor that doesn’t change as the company grows. Fair market value is what the stock is actually worth. For common stock granted to employees, it’s set by a 409A valuation once the company has raised money or has real operations. For investors, the price per share is negotiated in each round, and it’s routinely dollars per share while par value stays at $0.00001. See 409A Valuation and How to Value Startup Stock.
Delaware allows it, but we don’t recommend it for startups. Venture documents, cap table software and franchise tax filings all assume a stated par value, and a nominal par of $0.00001 gives founders the low purchase price they need without any of the questions no-par stock raises.
Yes, by amending the certificate of incorporation with board and stockholder approval and a filing in Delaware. It’s rarely worth it. If you’re forming a new company, get it right in the charter.
For more, see Authorized, Outstanding and Fully Diluted Shares and Delaware C Corp Incorporation Documents. If you’d like us to set up your company with the right share structure, see our Corporation Startup Package or contact us.
