How To Issue Stock In Your Corporation
Chas Rampenthal (Attorney-at-Law) gives expert video advice on: How do I issue stock in my corporation?
How do I issue stock in my corporation?
Issuing stock can be done in a number of ways, and I look at it as the initial issuances of the founders of the corporation, and then additional issuances, whether its to employees, investors, partners, vendors or whomever. So if we take these kind of two-fold; step one, the initial investors, not investors, the initial founders of a company, so if its myself and two other people and we have a company and that company has, you know, a hundred thousand shares of stock that it can issue, each of us might want to get three hundred and, you know, three hundred, or thirty-three thousand, three hundred and thirty-three shares, and one person might get the extra share or it might just go away into nothing. So that way we would all have one-third of the company and for that we would have issued some sort of capital contribution, whether its in the form of money or services that we've already rendered or propery or assests that we've contributed to the company. Now, afterwards if you want to issue stock to other people, like employees, you can do it in a number of ways. You can do it based on their service to the company, as to if they've done a proper amount and they've accordingly paid something in, in their own human capital into the comany, and you can account for that and issue them shares in the company. Also, there's a way through stock plans, option plans, people have heard of, or warrants or restricted stock. There's just a bunch of different ways that you can compensate partners and employees for stock. Now, when you do that you're gonna want to have a stock record book and a transfer book and a ledger where you can take a look at the certificates that you've signed, the one's that you've filled out and issued in a place where you'd have a copy of them so you always know what's outstanding, the dates that they were issued, the amounts, the money that was spent, and then if they're ever transferred or a portion is transferred, you have a place and a nice clean and legitimate record for it. Now, also whenever stock is issued, typically in a board meeting, you would go and you would ratify that issuance and say "Oh, you know, these stock certificates one, two, three and four were issued to names a, b, c and d."