Par value means the minimum price at which a corporation can sell its shares to its shareholders. Setting a par value is required when forming a corporation in some states, but it is not required when forming a corporation in other states, such as Oregon. States such as Oregon have done away with the concept of par value because it is considered to be antiquated and no longer necessary because greater investor protections now exist than did exist when the concept of par value came into being. In Delaware, where setting a par value is typical — the value is set forth in the Certificate of Incorporation — founders often list a minimal par value for the corporation’s common stock. It is rare to see a value above $.01, and more often the value is set at something like $.001 or $.0001 or even a figure less than that amount. The purpose for such a low value of the stock is that when founders purchase their initial common stock from the corporation — founders typically purchase shares well into the millions of the authorized stock — they will pay a minimal amount for such shares. Another reason for setting a low value is to ensure that the Delaware franchise tax will be limited as much as possible. Setting the value too high can trigger a substantial franchise tax bill from the Delaware Secretary of State’s office, which is a common mistake made by founders who choose to form Delaware corporations on their own. As opposed to corporations, LLCs and other entities do not establish a par value, which is a defined term unique to corporations. However, LLCs and other entities must still establish the price at which the company’s founders and other equity holders purchase their equity in the company. In an LLC, that price is often set forth in the operating agreement of the company.