Calculating And Issuing Shares of Stock

In order to properly complete your corporate documents, you will need to determine the number of shares of stock to be issued to the various shareholders. As a small business, most small businesses initially authorize either 1,000 or 10,000 shares of Stock. It is recommended that you do not issue all of such stock upon the inital issuance. Stock that is not issued is held in reserve. It does not determine percentage of ownership, but leaves additional stock in reserve in the event that you agree to add additional shares.

The minimum filing fee of $60 included in your incorporation documents is based on a maximum of 60,000 authorized shares. If you plan to authorize more than 60,000 shares, the filing fee will increase. DO NOT AUTHORIZE MORE THAN 60,000 SHARES IN YOUR ARTICLES OF INCORPORATION UNLESS YOU RECACALCULATE THE FILING FEE AND MAKE APPRPRIATE CHANGES TO YOUR DOCUMENTS AND PAYMENT.

Additional fees for authorized shares over 60,000 is $30.00 for each additional incriment of 20,000 authorized shares with a maximum filing fee for authorizing shares in excess of 10,000,000 of $200,000.

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If you have any questions about this, contact the state incorporation office. CLICK HERE

You can always amend your Articles of incorporation to authorize additional shares of stock, but this requires additional state filings and related fees.

In the usual situation, where there are three shareholders for example, each who own one-third of the stock of the Corporation, you should issue each shareholder an equal number of shares, for example 100 shares each, leaving 700 shares in reserve. Where percentage of ownership is more complicated, you should use the same general principals to calculate the actual number of shares to be issued. The main point being that it is adviseable to leave shares in reserve.

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