Legal Question in Business Law in New York

You are probably OK with the 200 shares without par value. Later on, you can amend the Certificate of Incorporation in order to create the number of shares tailored to your investment program.

In general one should purchase shares at the onset of formation as presumably such shares are the least expensive during the life time of the company. In addition to my colleague's remarks, be mindful that the state of incorporation could play a role as certain states (such as New York) have a fairly expensive franchise fee on an issuance of large number of shares of stock.

I highly recommend that you consider retaining a startup attorney. Not making the company investor friendly, as far as proper issuance of stock, state of incorporation, correct compensation and agreements with individuals who collaborate with you, could turn off investors. I have seen investors walk away from companies who were too messy for their taste. Those founders discovered that they may have saved a few dollars at the beginning but lost a whole lot soon thereafter.

Feel free to contact my office at your earliest convenience.

Roman R. Fichman, Esq.

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While I concur with both authors, some considerations are: how many shareholders there may be and how percentage of ownership will be represented by the shares, as well as when different stockholders come into the business. Issues may exist about dilution, differentails in share prices, etc. and close supervision may be necessary to avoid stockholder conflicts. This is a response to an Internet question and the reply is based upon the limited facts presented and is not intended to be legal advice or as creating an attorney-client relationship.