After you have formed your corporation, one of the first tasks is to issue shares to the shareholders of the company. There are six basic steps to correctly issuing shares.

Step 1 – Write or type the names, addresses, and percentage of the company of each of the shareholders who will own it.

Step 2 – Determine how many shares the corporation has available to issue. The number of shares authorized to be issued is indicated on the first page of its Articles of Incorporation. If you can’t find them there, you can go to your corporation’s listing on the Secretary of State’s website and see how many shares are authorized. If you still can’t find the share number, call the Secretary of State directly.

Step 3 – Calculate the number of shares you will issue to each individual shareholder based on ownership percentage and number of shares. Do not issue all available shares. If you have 25,000 shares available to issue, you may want to issue just 1,000 or 100 shares to start. This will give you more shares to issue at a later time if you have additional investors or shareholders coming into the company.

Step 4 – Physically write the stock certificates with the name of the shareholders, the number of shares they own, and the certificate number. Stock certificates can be purchased at office supply stores, directly online, or you can purchase a corporate record book that will usually come with your first 10 or 20 certificates.

Step 5 – Record each certificate that has been issued in your share ledger. In the stock ledger, you will record the name of the shareholder, the number of shares issued, the stock certificate number, how much they paid for the shares, what type of shares they were (common, preferred, voting, non-voting). to vote, etc.). .), the date of the transaction and who sold the shares to the new shareholder. If the company issued the shares, it would be considered an initial offering by the company.

Step 6 – Mail the share certificates to each shareholder.

These steps provide a guide for issuing stock in a new corporation. Additional tasks that must be completed when forming a new corporation are the initial meeting of shareholders and directors, drafting resolutions, and opening a bank account.