by gmil88
12 replies
Hi Warriors, I am attempting to register a business in Illinois. I am filling out the Articles of Incorporation right now but I am stuck on the part about "stock". I have no clue what I am supposed to fill in for these fields.

The three fields are;
Number of shares Authorized:

Number of shares proposed to be issued without further report to the Secretary of State:

Consideration to be received therefor:

If anyone could explain this part to me and give me any suggestions I would deeply appreciate it.

BTW, my business is going to be a web service business offering web design, seo, etc.


Thank you in advance.
#warrior
  • Profile picture of the author E. Brian Rose
    Your best bet is to speak with a business adviser or attorney in your state. You will get all kinds of legal help from a forum, but then you have to figure out which of those suggestions are legitimate and which are from people just wanting to sound smart.
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  • Profile picture of the author Jit Lim
    Two people I suggest you talk to is your accountant and legal person specializing in this area. If you are doing this yourself, generally you would own 100% of the shares of say 100 units for example. But if you are running the business with a partner, you need to split accordingly, e.g. 50/50. You also need to consider tax implications depending on the amount of shares you hold and earnings. Its important to get this right at the start, otherwise it will be costly to undo down the track.
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  • Profile picture of the author MightyWarrior
    Originally Posted by gmil88 View Post

    Hi Warriors, I am attempting to register a business in Illinois. I am filling out the Articles of Incorporation right now but I am stuck on the part about "stock". I have no clue what I am supposed to fill in for these fields.

    The three fields are;
    Number of shares Authorized:

    Number of shares proposed to be issued without further report to the Secretary of State:

    Consideration to be received therefor:

    If anyone could explain this part to me and give me any suggestions I would deeply appreciate it.

    BTW, my business is going to be a web service business offering web design, seo, etc.


    Thank you in advance.

    Stock is only for your business if you are going public.

    In most cases you are a private business and will remain
    private. The reason I say this is because you didn't know
    what "stock" meant -- just sayin'.

    Goog stock or search on the net and you'll find your answers.
    Also call up and talk to the librarians in your public library.
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    • Originally Posted by MightyWarrior View Post

      Stock is only for your business if you are going public.

      In most cases you are a private business and will remain
      private. The reason I say this is because you didn't know
      what "stock" meant -- just sayin'.

      Goog stock or search on the net and you'll find your answers.
      Also call up and talk to the librarians in your public library.
      Hint: Not all stocks are publicly traded.

      You might want to talk to a librarian. They're pretty knowledgeable.

      fLufF
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      • Profile picture of the author gmil88
        Originally Posted by fluffythewondercat View Post

        Hint: Not all stocks are publicly traded.

        You might want to talk to a librarian. They're pretty knowledgeable.

        fLufF
        --
        I thought the exact same thing when I read it. He must have understood what I was asking about.
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  • Profile picture of the author robestrong
    If it's just you, I would go into a sole proprietorship. It's not worth setting up an incorporation unless you have a lot of people and assets to protect. Sole proprietorships are easy to set up and get an EIN for tax purposes.
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  • Profile picture of the author Green Moon
    It's really pretty simple.

    Authorized shares are the number of shares your corporation may issue. You can always increase the number of shares but to do so you have to file an amendment to your articles of incorporation.

    Issued shares are the number of shares you plan to issue initially.

    Consideration is the total amount you plan to pay for the issued shares.

    For example, let's say you authorize 1,000 shares and issue 100 to yourself. You open a bank account by writing a personal check to the corporation for $500. In that case your authorized shares are 1,000; your issued shares are 100; and your consideration is $500.

    As a one person corporation, the number of authorized and issued shares is really not very meaningful, although you have to put in some numbers. If you ever decide to issue shares to an investor or a key employee, you can always amend your corporation's articles of incorporation.

    The consideration is a little more important. Since you are forming a corporation presumably to help limit your personal liability, you need to understand that inadequate capitalization of the corporation is one of the key factors in whether a credit can "pierce the corporate veil" in Illinois. See Piercing the Corporate Veil :: Illinois Business Attorney

    For that reason, it is generally a good idea for your consideration to be at least the amount you expect to put into the corporation to get your business started.

    If you have any questions, I suggest you talk to a business attorney.
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    • Profile picture of the author gmil88
      Wow thanks a lot Green Moon, that really explained most of it for me. I am still going to need to talk to a lawyer I think, but at least now i'm not as lost. Thanks.
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  • my humble advice: get a free consultation with a lawyer, or get a cheap lawyer consultation on this one. Every state has different laws.
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  • Profile picture of the author travlinguy
    Go to Amazon and buy a book on how to incorporate. Not an affiliate link:

    Amazon.com: How to Incorporate: Books
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  • Profile picture of the author David Keith
    there are also several companies who help small and micro sized business owners incorporate for a very reasonable fee. (cheaper than a lawyer).

    I won't suggest these services are as good as a consulting a lawyer, an accountant, and a tax professional, but these guys do a pretty good job.

    just google it.
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  • Profile picture of the author williamk
    Banned
    I don't think it will matter if you are the sole owner. Incase you have a partner then you should fill them up to see what is their take in the company. If you are still not sure what to do, consult a lawyer. They can handle this situation better.
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