My name is Brandon Washington, the Cheif Financial Officer of an
up-and-coming computer manufactuer located in the southeast region of
the United States. As of right now our company has 1000 shares of
common stock, 50% belonging to myself and 50% belonging to the Cheif
Executive Officer. As of right now we have companies as well as
individuals wanting to invest in our company and we would like to know
how we would go about aquiring additional shares.
Also we would like to 1) How do we go about determining the value of
our common shares, 2) What is the proper procedure of selling common
shares?
We are a S-Class corperation.
Thank you in advance,
Brandon Washington |
Request for Question Clarification by
ragingacademic-ga
on
13 Jan 2003 22:19 PST
Brandon -
Thanks for your question.
Do you mean that you would like to issue additional stock so that
third parties of interest will be able to invest?
How did you go about issuing the original 1,000 common shares?
Did you work with a lawyer?
Did you work with a lawyer to incorporate?
thanks,
ragingacademic
|
Request for Question Clarification by
serenata-ga
on
13 Jan 2003 22:54 PST
Hi Brandon ...
Part of the question on the issuance of further shares of stock will
depend on teh state in which you incorporated your business.
It appears right now that you have issued all the outstanding shares
of the corporation.
As I understand your question, you now wish to authorize the issuance
of additional stock, representing shares of your company to outside
investors. If that is not what you're asking, please let me know.
The determination of the value of the stock will be based on your P&L
statements and the number of shares issued.
Here's a simple way to think of it. If the company is worth $1000
right now, after offsetting the assets and liabilities, and you have
1000 shares of stock issued, each share is worth $1. As I said, it's
an oversimplification, but you get an idea on how you can determine
the value of the stock.
Knowing the state under which you are incorporated will help any one
answering the question give you the answers you are seeking.
Serenata
|
Clarification of Question by
aieoncorp-ga
on
14 Jan 2003 10:33 PST
Hello and Thank You for attempting to answer my question.
We did not work with a lawyer, and secured our 1,000 common shares at
the corresponding state office when filing the article of
incorporation. We are in the state of Arkansas, and looking to
acquire the additional shares to sell to outside investors, while
still retaining 51% of the company.
A different classification of stock may be necessary, but we are not
sure. We will need to know an appropriate number of additional shares
to purchase, and what to do in order to recieve them. Our 2 employees
(including myself) own all shares, 500 a piece at $.01 a share when
purchased.
In addition we are looking into buying the new shares at $.001 a
share, does this make a difference?
How can you justly determine a company's worth if you do not own
property? Is there an equation that has to do with total shares, past
profits, and fiscal quarter profit regions? Please help since this is
very important and very confusing situation.
Best Regards
|
Request for Question Clarification by
serenata-ga
on
14 Jan 2003 13:28 PST
Hi Brandon:
I think I see what you have done by looking at the Arkansas Secretary
of State's online filing forms for corporations.
https://www.ark.org/sos/ofs/docs/index.php
The Articles of Incorporation require stating the number and class of
shares authorized to be distributed, which you did when you filed your
corporation (1,000 shares).
Notice the Amendment forms (DN-07).
From those forms, it is easy to see that the shareholders meet to
amend the Articles of Incorporation either by:
1. exchanging the stock and redistributing it; or
2. authorize the issuance of additional stock.
and then filing the Articles of Amendment to the Articles of
Incorporation.
Either of the above can have legal and/or tax consequences, so it
would be wise to consult with an attorney or tax pro to make sure
whichever you choose will be to your advantage and not to your
detriment.
It's a LOT easier to take care of it before you make the changes and
amend your Articles of Incorporation than it will be later to try to
fix something.
I hope this helps.
Serenata
|
Clarification of Question by
aieoncorp-ga
on
15 Jan 2003 08:09 PST
"We did not work with a lawyer, and secured our 1,000 common shares at
the corresponding state office when filing the article of
incorporation. We are in the state of Arkansas, and looking to
acquire the additional shares to sell to outside investors, while
still retaining 51% of the company.
A different classification of stock may be necessary, but we are not
sure. We will need to know an appropriate number of additional shares
to purchase, and what to do in order to recieve them. Our 2 employees
(including myself) own all shares, 500 a piece at $.01 a share when
purchased.
In addition we are looking into buying the new shares at $.001 a
share, does this make a difference?"
This question wasn't completely answered. Are we required to fill out
the articles of amendment to aquire additional shares? If so, who are
we required to turn them in to?
"How can you justly determine a company's worth if you do not own
property? Is there an equation that has to do with total shares, past
profits, and fiscal quarter profit regions? Please help since this is
very important and very confusing situation."
This question wasn't touched upon either. We are aware there is a
certain way to equate the value of your companines stock, but we
wanted to know is there in exact blueprint that should be followed?
|
