Under Article 3 of the UCC, a Note Is a Promise

question 155

True/False

Under Article 3 of the UCC, a note is a promise by one party to pay a certain sum of money to another party. Two parties are involved: the maker and the payee. Payment may be set at some time in the future.

---

Definitions:

No Par Value

Refers to shares issued without a stated face value, with their selling price determined by the issuing company.

Stated Value

A value that is assigned to no-par value stock by the company’s board of directors, which becomes the legal capital per share of the stock.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Subscriptions Receivable-Common Stock

An account that represents amounts due from subscribers who have agreed to purchase common stock of a company but have not yet paid.