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 $58.00 included in your incorporation documents is based on a maximum of $30,000 in authorized capitol. If you plan to authorize more than $30,000 in authorized capitol, you will need to consult the fee schedule to determine the correct filing fee. CLICK HERE

Your form documents included in your incorporation package call for 10,000 shares of $0.01 par value stock and would require only the minimum. If you change these defaults, please be sure to consult the fee schedule referenced above. You can also get preclearance of your filing for a fee of $55.00 to be certain that there are no technical glitches in your documents that would cause rejection. 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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