Legal Question in Securities Law in Nevada

Re: unissued stock

The Corporation.

Re: unissued stock

This question is like asking "who are the parents of unborn babies?"

Unborn babies don't have parents, at least until they are conceived, and at that point they are really only prospective parents. Unissued stock doesn't have an owner, for much the same reason - it doesn't exist.

However, couples start calling themselves parents on a prospective basis, and talk about their baby before it is born.

Similarly, "unissued stock" may refer to shares that are authorized and which the corporation is planning to issue in the forseeable future.

With respect to shares that are going to be issued, just as with fetuses that are going to be born, there may be prospective owners -- persons with viable claims to be the owners of the shares upon their issuance -- just as there will be, hopefully, a proud couple waiting to be parents when the baby is delivered.

The claim to become the owner of newly-issued stock could be based upon (1) a stock-subscription agreement between the corporation and the owner-to-be; (2) a pre-emptive right in a shareholder agreement that allows an existing holder to maintain a given percentage ownership in the issuing corporation; (3) exercise of options or warrants; or (4) some other basis of claim on the new shares.

Anyone holding such rights might think of himself or herself as the owner, but neither they nor the corporation really "owns" the shares until they come into existence through issuance.

This discussion may not answer your question, and/or there could be other circumstances that prompt you to ask. If you would like a further analysis of a problem, please feel free to contact me.