basic questions about starting a company

paulw1283paulw1283 Posts: 1subscriber
edited June 2008 in Watercooler Talk




I want to start a S corporation. I`m the only one in the company so far. I want to start the company with an inital capital of $5000.
When I was trying to fill out the Article of Incorporation for my state, there is a section that asks how much "authorized stocks" and "issued stocks" there are. Does "issued stocks" mean the stocks that my inital $5000 is worth? So if each stock is $5, then I just issued 1000 initial stocks to myself? Is that how that works? And is authorized stocks the maximum number of stocks that the company can ever issue? What do you recommend the authorized stocks to be?
So I should put 1000 as the initial stocks and then make it $5 per stock on the Article of Incorporation? Then I can just put $5000 in a business bank account and start doing my business?
These are basic questions but it`s hard to find a clear answer. Any help would be greatly appreciated.
Thanks

Comments

  • minimegeologyminimegeology Posts: 26subscriber
    I would say to double check with an attorney.  I have an S-Corp and mine says 1000 shares although I couldn`t tell you how the attorney came up with that number.  Also, you could check out SCORE and ask one of the their counselors.  If you can find one that is an attorney it will save you money.  You can ask SCORE counselors questions online which is nice.
     
    Don`t forget to get your Federal Tax ID number too.  You will likely need that to open a bank account.  You can do that online now too, I believe.
     
    Tracy
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