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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 9890
Experience:  30 years of corporate, litigation and international law
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I have a startup. past year, we stop doing the

Customer Question

hi, I have a startup. for the past year, we stop doing the old business, and start doing the new one. so I changed the business name and category. Now I want to reallocate the shares. one shareholder will not have shares any more. he owns 120 shares. the other two small shareholders needs to reduce the number of shares. how can I do this?
Submitted: 1 year ago.
Category: Business Law
Customer: replied 1 year ago.
should I use stock transfer form or stock purchase form? where can I get the form?
Expert:  Richard - Bizlaw replied 1 year ago.
Hi thanks for asking for me. I have some questions. Was the new business started under the same corporation as the old business had? Are the old shareholders agreeable to not be involved in the new business? Did you use any of the assets of the old business to start the new company?
Customer: replied 1 year ago.
It is the same corporation. New business does not use any old business asset. They are totally different things. All shareholder agrees with the change .
Expert:  Richard - Bizlaw replied 1 year ago.
Since you have the agreement of the shareholders, the easiest way to transfer the share is to have the shareholders who are giving up shares to transfer their shares to the new shareholders by simply endorsing the shares in blank. Here is a form you can use. https://www.amstock.com/shareholder/TransferOwnershipForm-fields_111914.pdf The amount paid for the shares can be a nominal amount such as $10. The shareholder who will cease being a shareholder would get the $10 and his shares would be cancelled and 120 new shares issued to who ever is supposed to get them. Those whose shares are being reduced would turn in their old shares and get new shares issued in the new amounts and the shares that they gave up would be transferred to the new shareholder through new certificates. They would get a small payment for the shares they gave up. Since only a nominal payment will be made for the shares in question you could just do a bill of sale establishing the price to be paid for the shares being transferred to the new owners. For example you could pay $0.10 per share. The cost of buying the 120 shares would be $12 and the cost of purchasing the shares from the other small shareholders who were staying in as shareholders would be equally small. If I have answered all your questions, please positively rate my answer as that is how I receive credit. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.
Customer: replied 1 year ago.
should I put my old company name for the share transfer or the new company name?
Customer: replied 1 year ago.
In the stock certificate the shareholder has, the stock certificate has old company name there.. should I put my old company name for the share transfer or the new company name in the form you posted?
Customer: replied 1 year ago.
also the form you provided has no place to put the money you mentioned above. Is it the right form?
Expert:  Richard - Bizlaw replied 1 year ago.
I assume you changed the company name by filing a certificate of amendment to the certificate of incorporation. You should use the new company name on the new certificate. On the consideration to be paid for the stock it should go in a separate document. Here is a form bill of sale you can use as a template. http://formdownload.org/legal/bill-of-sale/bill-of-sale-for-stock/ The stock transfer form I gave you is what is put on the stock certificate itself to transfer the stock to the new owner. If I have answered all your questions, please positively rate my answer as that is how I receive credit. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.
Expert:  Richard - Bizlaw replied 1 year ago.
If I have answered all your questions, please favorably rate my answer as that is how I get credit.

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