Legal Question in Business Law in California

Re: Corporation's Shareholders

Not as simple as one form. To get it done right, you will likely need to hire a business attorney.

Re: Corporation's Shareholders

I sent in an answer to another copy of the same question a few minutes ago without having seen this version of the question, nor Messrs. Grant and Nelson's answers. Those answers remind me to mention another consideration. Taking money, property, services, etc. from investors in exchange for securities, including stock in a company where the investor is becoming the majority owner, is a highly regulated activity. The issuer has to comply with laws requiring registration, making disclosures, delivering a prospectus or private placement memorandum, for example. Fortunately, for smaller corporations where the stock purchaser is an insider or otherwise in a position to know what he's getting into, there are exemptions from all the red tape, or at least most of it. However, the small corporation must still prepare and file a notice of exemption with the California Commissioner of Corporations when it issues stock to anyone, including its founder. The most commonly-claimed exemption is in Corporations Code section 25102(f), and the 25102(f) form and instructions are downloadable from the Corporations Commissioner's Web site. Read the instructions carefully, then if this is the right form, fill it out and send it in with the proper fee. If you don't understand it or don't want to spend the time to educate yourself on this stuff, get a business lawyer to help.

Re: Corporation's Shareholders

Yes. Proper notices to the state of stock transfer, appropriate Shareholders Agreements, proper documentation in the corporate minutes, and so on. Failure to properly manage the corporation and to document the corporate activity like this subjects the officers, directors and shareholders to the risk of personal liability in the event someone successfully sues 'to pierce the corporate veil'. Feel free to contact me if serious about getting the legal help you need.