Are there any filing requirements when issuing new shares in an S-Corp?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Are there any filing requirements when issuing new shares in an S-Corp?

My company is an S-Corp. I am the sole owner and I want to add my wife as a shareholder. She will also work for the company (working with clients and providing marketing expertise internally). The Articles of Incorporation state 19k shares authorized with 10k shares issued to me. Can I issue shares to my wife (up to 9k) for an arbitrary value (e.g.$1 and/or in consideration of the value she’s bringing to the company) by documenting that I (as sole Director and shareholder) have approved the new issue? Would I need to file anything with the State?

Asked on February 21, 2012 under Business Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

For issuance of shares to your wife as a shareholder in your S corporation, she needs to provide something of value under the law. Likewise there needs to be a shareholder's meeting regarding the value (consideration) to be given for the shares, minutes for the meeting along with notice for the meeting and issuance of actual shares.

Some consideration could be shares in exchange for wages by your wife.

Nothing needs to be filed with the Secretary of State. I suggest that you consult with a business attorney further about your question so that you can get the paperwork in proper format.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption