S David Goldenberg's Answers

For a software startup in California, is it worthwhile to incorporate in Nevada? If we mess up, won't Nevada protect us better?

While I agree with the first poster that piercing the corporate veil is relatively difficult in California, and also agree that you will have additional expense by incorporating in NV and qualifying to do business in California, I note that both attorneys are licensed in California. I have not done research on the issue of piercing the corporate veil and compared CA law on this issue to NV law. That would really be the direct answer to the question that you are asking. That being said, I...

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Can I add a shareholder-director to my S corp and issue him shares at the same price as the founders?

Issuing the stock at $0.01 per share is claiming that the company's current fair market value is $150. The current board of directors has a fiduciary duty to issue new stock at fair market value. How that is determined is mostly up to the board, but should have some reasonable basis. If you have $10MM in assets and $1MM in profits, saying the company is worth $150 is a stretch. If you have $1000 in assets and have lost money the last few years, it may be possible. There is a risk if you...

How to add a new partner to a CA S-Corp ?

As mentioned in the last response, a corporation (including an S-Corporation) is typically owned by shareholders, which are issued shares. It is also run by officers and directors. Depending on how your company was set up, there may also be one or more agreements among the founders (typically called a 'Shareholders' Agreement' or 'Founders' Agreement'). Without seeing your documents it is hard to advise exactly what needs to be done. If the 4 of you are currently shareholders, it would...