Can a one-person corporation, incorporated in 2008, but never issued/purchased shares do so now?

Asked 11 months ago - Oakland, CA

Relevant facts: have a bylaw and minutes book in records. One President (the founder) and a director (minority investor).

Attorney answers (4)

  1. Michael Charles Doland

    Contributor Level 20

    2

    Lawyers agree

    Answered . If you have more than one shareholder, you should be consulting an attorney. You may (and probably do) qualify for an exemption from obtaining a permit to issuing your shares, but a lawyer will tell you that whenever two or more unrelated persons own shares there should be a buy-sell agreement since there is no public market for the shares in the event of disablity, death or retirement. Delay in issuing the shares is not fatal, but the sooner done the better.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more
  2. Dana Howard Shultz

    Contributor Level 20

    2

    Lawyers agree

    Answered . Shares may be issued at any time.

    You should retain a business lawyer to help you. Not only is it important to ensure that shares are issued correctly - there may be other formation-related issues that need to be straightened out.

    This information does not constitute legal advice and does not establish an attorney-client relationship.
  3. Peter Collins Freeman

    Contributor Level 10

    1

    Lawyer agrees

    Answered . There are several additional facts that would be necessary to provide a complete answer and you should consult an attorney to discuss these facts. But, depending on what the corporation has done to this point, and how many shareholders you intend to issue stock to, there should not be any irreconcilable problems or issues for issuing stock at this point.
    Issuing stock can be a tricky situation, and consulting a local attorney to assist you is the best advice.

    The foregoing is not offered as legal advice, but is a general analysis of the situation posed by your question.... more
  4. Eric Stephen Pommer

    Contributor Level 4

    Answered . It is not clear from your question whether there are one or two shareholders. You say it is a "one-person corporation" but then indicate there is a "minority investor." You should know that a failure to issue shares may, in and of itself, persuade a court to hold shareholders personally liable for corporate debts (piercing the corporate veil). Yes, you can issue shares now, and you will have to notify the California Securities Commission of the fact that you are issuing shares -- and advise which securities exemption you are claiming (a notification can be filed online at http://www.dbo.ca.gov/LOEN/default.asp). I suggest that you consult with an experienced business attorney to get your corporate affairs in order as soon as possible.

    Disclaimer: This answer is provided for informational purposes only and is not intended to be relied on as legal... more

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