Can You Incorporate Without Giving Out Shares?
For your business to be considered a corporation, it's necessary for you to issue stock. When your corporation comes into existence, you'll immediately be able to issue your desired number of shares. Additionally, your corporation may be able to issue both common and preferred stock.
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Shareholders
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A shareholder is the owner of the corporation. If your corporation issues 100 shares of stock, of which you own 75 shares, you'll have a 75 percent ownership interest. Original owners of a corporation may elect to have preferred stock in lieu of common stock. Preferred shareholders may receive preferential treatment when it comes to dividend distributions and corporate liquidations.
Stock Certificates
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A stock or share certificate provides a shareholder with physical evidence of his ownership interest in a corporation.
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Par Value
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The par value of your company's shares is determined when your corporation is formed. Corporate shares can't be sold for less than par value. However, you may be able to sell shares of your corporation at par or whatever price the market will bear.
Considerations
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Most states require corporations to issue at least one share of common stock. In your articles of incorporation, you're required to indicate the number of shares you want to distribute. Most times, corporations don't issue all available shares at once. This allows you to distribute shares to investors at a time when your corporation needs to raise capital.
Small Corporations
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Most states allow corporations to be owned by a single individual. A corporation may have any number of shareholders it wants. In small or closely held corporations, you'll be able to purchase stock directly from the company. Small corporation shares are usually held by family members or individuals who've played an integral role in operating the business.
Large Corporations
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Corporate stock of large companies can be purchased on the open market at Nasdaq and the New York Stock Exchange.
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