Issuing stock to shareholders, even in a very small corporation, is a complicated process. And if your company is public now or will be in the future, there are a mind-numbing number of rules and regulations you must follow.
Consult this checklist to ensure that you don’t miss any critical steps.
- Make plans to issue stock to shareholders. Be sure you are complying with state and federal securities laws.
- Set the price and number of shares. Bear in mind that the value of the corporation will be diluted by the stock issuance, so set the price and number of shares very carefully.
- Prepare stock certificates. If you will be issuing common and preferred stock, you’ll need different certificates for each.
- Create a stock ledger. Record all information about stock transactions in this ledger.
- Submit appropriate filings. Make the required filings with the SEC and any state securities administrators promptly, usually within 15 days of the stock sale.