Delaware vs Nevada vs Wyoming
Asked by: Matthew - 21 October, 2011
In the section comparing incorporation advantages between Delaware, Nevada, and Wyoming, it is stated that a Delaware Corporation Director may determine the value at which to sell shares of stock? Does that standard also apply in Nevada and Wyoming?
In the section comparing incorporation advantages between Delaware, Nevada, and Wyoming, it is stated that a Delaware Corporation Director may determine the value at which to sell shares of stock? Does that standard also apply in Nevada and Wyoming?
Answered by: Roman Fichman, Esq. - 29 October, 2011
Matthew,
In general, as a basic principle of corporate governance, the directors (not the shareholders) control the decision to set the valuation and sell the company (subject to any preemptive rights the shareholders may have).
I imagine this is true in Nevada and Wyoming as well, but I'm not sure. One also needs to distinguish valuation of equity from valuation of options which a director can no longer set independently. These days, valuation of options is set by the relatively new IRS mandate for a '409a valuation process'.
I hope that answer helps.
Matthew,
In general, as a basic principle of corporate governance, the directors (not the shareholders) control the decision to set the valuation and sell the company (subject to any preemptive rights the shareholders may have).
I imagine this is true in Nevada and Wyoming as well, but I'm not sure. One also needs to distinguish valuation of equity from valuation of options which a director can no longer set independently. These days, valuation of options is set by the relatively new IRS mandate for a '409a valuation process'.
I hope that answer helps.
