What are the minimal amount of stock/shares that you can put on your corporation registration forms when you are just starting.
Miami, FL |
in the state of florida registration forms to start a corporation, one of the questions asked is for an amount for shares and stocks,i have'nt a clue,for we are just trying to start our business which will be in the music industry,help please.
I generally advise 50,000 to 100,000 shares to start. You can have as few as you wish. Technically you could have 100 shares and distribute as you will. Often the decision is driven by how the state franchise tax, if any, is calculated. For example, I have a client in Ohio. Their annual fee for 100,000 shares was going to be over $1500, so we registered in Delaware and registered as a foreign corporation in Ohio. One Ohio company I represent has only 1500 shares, as that keeps the franchise tax at its lowest level.
There is a difference between the number of shares that the corporation is authorized to issue (the question you answer when you file the Articles of Incorporation with the state) and how many shares of stock will be owned by the current shareholders (bought by them).
Probably it is better to authorize more shares than you actually intend to divide among the initial shareholders, because that gives you the option later of letting someone buy stock from the corporation rather than from an existing shareholder.
You really should consult with legal counsel as to which entity format is best for you. It may be that it is better to set up a limited liability company rather than a corporation.
LEGAL DISCLAIMER: Please note that this comment does not constitute legal advice nor has an attorney-client relationship been created.The law may vary depending on the state in which you reside or the jurisdiction where the activity took place. This comment is intended only to give some direction in which to seek further guidance.