Corporation Share Allocation

[benjam1n]

What is the name of your state (only U.S. law)? Ohio

I just registered a new C corp with the secretary of state, 1500 common shares at $0.00 par value.

I am starting this in my spare time, and will be a perpetual work in progress before actually doing any business.

The corporation will have two owners, one owning 51% the other 49%.

My simple question, which I have not been able to locate an answer elsewhere: How do I provide documentation that each owner actually owns X% of the company? In this instance, we will be registering for DBE status. How can I show and document the majority of the company being owned by the female minority?

Thank you!

 

[LdiJ]

What is the name of your state (only U.S. law)? Ohio

I just registered a new C corp with the secretary of state, 1500 common shares at $0.00 par value.

I am starting this in my spare time, and will be a perpetual work in progress before actually doing any business.

The corporation will have two owners, one owning 51% the other 49%.

My simple question, which I have not been able to locate an answer elsewhere: How do I provide documentation that each owner actually owns X% of the company? In this instance, we will be registering for DBE status. How can I show and document the majority of the company being owned by the female minority?

Thank you!

You do that via internal documents that you draw up and sign. So, in your instance you would draw up a document outlining the shares that each person owns, which would be signed off by all parties. Each party would have an original signed copy, with the company also having an original signed copy.

However, why a C-Corp? A C-Corp is generally not the way to go for a new small business. An S-Corp is generally more appropriate.

 

[latigo]

What is the name of your state (only U.S. law)? Ohio

I just registered a new C corp with the secretary of state, 1500 common shares at $0.00 par value.

I am starting this in my spare time, and will be a perpetual work in progress before actually doing any business.

The corporation will have two owners, one owning 51% the other 49%.

My simple question, which I have not been able to locate an answer elsewhere: How do I provide documentation that each owner actually owns X% of the company? In this instance, we will be registering for DBE status. How can I show and document the majority of the company being owned by the female minority?

Thank you!

You my friend are hopelessly lost! And thinking that your question is "simple" indicates desperately lost.

What you are contemplating is not classified as a DIY project. Not for the inexperienced.

So, I suggest that you start by reading Title XVII of the Ohio Revised Code "General Corporate Law". After which, finding you can't make heads or tails of it, hire a corporate lawyer, who likely tell you that you made a huge mistake in opting for a corporate entity rather than a Limited Liability Company. The latter being much "simpler" to manage, function and create ownership in the form of memberships.

In a corporation, although ownership is reflected in the ownership of corporate stock, that stock cannot be issue accept for value received. Plus you have to have written by-laws, all sorts of minutes authorizing the issuance of stock, a stock book or register, annual meetings of stocky holders, election of directors, appointment of officers, annual reports ALL reflected in written minutes etc. etc. Simple?

Either entity "can" serve to isolate personal assets from business creditors, but the corporate form is much riskier in this respect because of the record keeping requirements needed to avoid it being declared an alter ego. Meaning the business is being conducted as a corporate entity in name only, which voids the protection of personal assets. Not that creditors of an LLC can't get to personal assets of the members, but an LLC doesn't require as much detail in record keeping.