Legal Question in Business Law in New Jersey

Re: issuing shares

First, your company needs to be organized as a corporation. Assuming this is the case, your shareholders agreement will need to be amended to include your investor as a shareholder. There should also be a separate option agreement between the investor and the corporation outlining his right to purchase additional shares going forward.

We would be happy to assist you with structuring this arrangement. Please give me a call to discuss the details.

Re: issuing shares

The answer depends on whether you have an existing company structure or if you are still in the process of organizing. Either way, what your investor wants is possible, the details would differ.

Rather than jump into a technical solution to this particular investor's wishes, I recommend that you first look at what the company needs and what the objectives of its founders (you) might be. That will tell you whether this offer for financing is a good deal for you in the long run. There are plenty of investors out there who are willing to fund a start-up company in exchange for liberal buy-in rights if the company is a success. That translates into you take most of the risk, do all the work, and the investor reaps the benefits. That is probably not what you had in mind but it may be what you get if you are not careful.

Invest the small amount necessary to have an experienced business lawyer look at the transaction and the structure of your business. My firm handles matters of this type. If I can be of further help to you, call or email. If you remind me that the contact was through Lawguru, the first consultation will be free.

See also: http://info.corbettlaw.net/lawguru.htm

Re: issuing shares

You would be very foolish, really foolish, not to hire an attorney to assist you with this. There is a great deal at stake. Get a business lawyer, someone who sets up and runs small businesses like yours.

I am in north Jersey. I do not think you are close enough for me to be able to assist. good luck to you.

Please, get an attorney.

Re: issuing shares

Basically you should first sit down with an experienced attorney in start-ups and he will give you several ways that these deals can be structured, you can decide which one best suits you and then you should sit down with the investor, his attorney and your attorney and hash out the details.

My Firm does this on a day to day basic. We offer an hour consultation free and I can go through the various ways to set this up. We represent several sneaker and apparel company's and have guided then from the beginning. No matter what you do, please take Robert's advice and seek counsel, whether it is with me or someone else.