Corporate Law Inc. status company, how to distribute shares?

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lwgreen

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Hello,

I recently filed for incorporation status for a company I am starting with two other people. I went with the default 200 shares, and I have a few questions. Right now I'm the sole proprietor. Who owns the 200 shares? Do I own all of them? Would it be possible for me to put them under the company name, so that when I distribute the shares to my partners and myself, we will have leftover shares for other investors? I would rather not have ~80% of the shares under my name while my partners have only 20%.

If/when they are under the name of the company, I can go about distributing shares by just filling out selling of shares forms and selling each share for like, $0.01 correct?

Also, once I have distributed the shares, is there a way to confirm with the DOS that we're all shareholders, so that when I file for C-corp status we can all sign to approve the filing?

Sorry if any of this is basic, I've done a lot of research on this but nothing seems to clearly lay out how to go about all of this.

Thanks,
Mr. Green
 
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lwgreen said:
Hello,

I recently filed for incorporation status for a company I am starting with two other people. I went with the default 200 shares, and I have a few questions. Right now I'm the sole proprietor. Who owns the 200 shares? Do I own all of them? Would it be possible for me to put them under the company name, so that when I distribute the shares to my partners and myself, we will have leftover shares for other investors? I would rather not have ~80% of the shares under my name while my partners have only 20%.

If/when they are under the name of the company, I can go about distributing shares by just filling out selling of shares forms and selling each share for like, $0.01 correct?

Also, once I have distributed the shares, is there a way to confirm with the DOS that we're all shareholders, so that when I file for C-corp status we can all sign to approve the filing?

Sorry if any of this is basic, I've done a lot of research on this but nothing seems to clearly lay out how to go about all of this.

Thanks,
Mr. Green
Click to expand...

Trust me on this, those are complicated questions.
It's time to hire your business a lawyer and avoid free answers that are derived by innuendo and common principles.
The questions you're asking can impact your tax situation and many other aspects of your business.
Spend a few hundred bucks to save yourself and your firm pain and thousands of bucks.
 
LWGREEN…

The 200 shares are yours and yours alone and you decide what to with them!

Once you pay the $10 Tax fee on shares, you are then authorized to issue 200 shares of NO PAR VALUE! That means you can price the shares at whatever value you choose as long as the total value does not exceed $20,000. You can certainly issue shares which total exceed $20,000, but you will first have to inform the powers that be in your area and the tax scenario changes dramatically as well, going northward, of course.

In states where they require par value for the common shares, the value of the stock is set very low per share and the par value is a legal consideration.

fredrikklaw
 
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