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Legalinfomd
Legalinfomd, Attorney
Category: Business Law
Satisfied Customers: 150
Experience:  Attorney with 24 years of experience in business law.
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Hi, My wife recently incorporated a c-Corp in Georgia. I

Resolved Question:

Hi,

My wife recently incorporated a c-Corp in Georgia. I would like to be added to the corporation at a later date (say 1.5yrs from now) as the primary owner/co-founder. I am not currently listed as owner on this c-Corp. Is this possible and what is the process? Does it require a sale of her stock to me? At what stage of the company can you add a co founder?

Also, I am looking for guidance on the number of shares issued in the company? The incorporation firm incorporated with 100k shares but it looks like 10million shares are more common. What can be done here. I heard of the forward stock split.is this easy to do and is it the right approach here.? What stage of the company can you do this( after product launch, hired employees, vc funding , paying customers) etc?

Thanks
Submitted: 2 years ago.
Category: Business Law
Expert:  Legalinfomd replied 2 years ago.

Legalinfomd :

Hello. I will respond to your question.

Legalinfomd :

With a closely held corporation (only a few stockholders), 100 shares is typically more than sufficient. The percentage of ownership is the important factor. A large number of shares is only necessary if there are a large number of stockholders or investors with rights to acquire shares in the future.

Legalinfomd :

At any time, a stockholder (in this case your wife) may transfer all or any portion of her shares of stock. She could transfer to you 100% of her shares, 50% of her shares, 51%, etc. The transfer can be in consideration for $1.00.

Legalinfomd :

With a corporation, there are stockholders, officers, and directors. A "founder" is not a corporate term. A founder of a business is typically the person who originated the company.

Legalinfomd :

Until such time as you become a stockholder, you can still serve as an officer and/or director of the company.

Legalinfomd :

If and when there should come a time at which you need investors to whom equity (i.e. stock) will be issued in exchange for capital, you would deal with authorizing additional shares if needed at that time.

Legalinfomd :

I hope that the foregoing information is useful. Do you need any clarification?

Legalinfomd :

One other thing - at such time as you receive shares from your wife or the corporation, you should consult with a tax advisor before the transaction is consummated to determine the tax impact upon you and your wife.

Legalinfomd :

Please remember to provide a positive rating for my response so that I will be compensated for my time. Best of luck with your corporate matter.

Legalinfomd :

It occurred to me that you did not mention how many shares of stock have been issued to your wife (you indicated that there are 100 shares authorized, but did not mention how many have been issued to your wife). If less than the entire 100 shares were issued to your wife, Another option for you when the time comes would be for the corporation to issue shares to you, rather than your wife transferring her shares to you, if you are to both own stock.

Legalinfomd :

It all depends on whether you want to be the sole stockholder in lieu of your wife, or co-owners.

Customer: Hi thanks for your response.
Legalinfomd :

You are welcome.

Customer: My wife is currently the sole owner of the corporation. There are 100000 shares in the pool and the assignment of the shares is not yet done. Around your last comment regarding assigning me shares currently, can she assign around 40000 to herself and remaining 50000 to me now even though I am not listed as an owner, employee, officer or director currently and don't plan to be for another 1.5 years.
Customer: Also if she does take outside investing , how should the 100000 shares
Customer: Be converted to 10 million at that time?
Customer: She may leave around 10000 unassigned shares in the pool to assign later to employees etc.
Legalinfomd :

The first step is for the corporation (not your wife) to issue shares of stock to those who will be stockholders of the corporation. If your intention is that your wife be the sole stockholder initially, then shares would be issued only to her. If it is your intention that you and your wife both be stockholders with 44% to your wife and 56% to you, then the corporation could issue 40,000 shares to your wife and 50,000 shares to you (or 40 shares and 50 shares, or 400 shares and 500 shares).

Legalinfomd :

You can be a stockholder at this time, and yet not be an employee, officer or director until a later date.

Legalinfomd :

If additional shares are needed in the future, articles of amendment can be filed with the State authorizing the issuance of a greater number of shares.

Legalinfomd :

I hope that clarifies your your additional questions.

Legalinfomd :

Please remember that you must leave a positive rating for my response or else I will not be compensated for my time.


Thank you again.

Legalinfomd, Attorney
Category: Business Law
Satisfied Customers: 150
Experience: Attorney with 24 years of experience in business law.
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