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Startup Law: What is the mechanics of issuing stock in a newly formed Delaware C-corp?

Avoid issuing a number of shares that comes too close to your authorized shares. If you need to increase your authorized shares, you’ll need to obtain BOD and shareholder approval according to the procedures specified in your corporate by-laws. Obtaining legal guidance is highly advisable. Are you issuing shares with a par value or no par value? There could be some serious tax consequences depending on your choice and how much stock you’re issuing.

Obtaining and retaining executed drafts of Subscription Letters and any Stock Restriction Agreements is crucial for bookkeeping compliance purposes. After printing the Stock Certificates, ensure that each issued stock is signed and dated by the Company’s President and Secretary.

Compliance with securities law requires additional recording and filing. Since these steps involve navigating a sea of complexities with precision, seeking the benefit of legal counsel to guide you will far outweigh the costs, as well as the risks of not doing so. For assistance with executing the mechanics of issuing stock, feel free to learn more at LawTrades or message me with any questions you have about C-Corp stock issuance.

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