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Ownership of company

Asked by: Mark - 9 January, 2013
https://d25eic0jctudgb.cloudfront.net/images/site/avatars/default.png-f1597c1da25f30f8c1a941405e8391c8 When a company is registered in the USA, does the company ownership (shareholders) and share allocation need to be part of the company registration?
Answered by: Robert Kowalski - 9 January, 2013
https://d25eic0jctudgb.cloudfront.net/images/site/avatars/35.jpg-687fc92d5f6c5febcbdccb6895b08b8c Mark,

For LLCs company ownership would be defined and recorded in the Operating Agreement. It's called "member interest" and is defined by percentage of ownership.

Ownership of corporation is vested in issued shares of stock. During the initial meeting of directors of a corporation the first issue of company stock would take place, and those shares would be then sold to the initial shareholders of the corporation.

Usually the number of authorized shares with their par value would be listed on company Articles of Incorporation, however those numbers only mean the board of directors is authorized to issue up to the authorized number of shares, and sell them to the shareholders (new or existing) for no less than the par value. Each new issue of stock that would make the total number of issued shares be more than authorized number require consent of shareholders and amendment of the articles.

Some states would permit listing owners on the Artilcles, but it's not a common practice and generally not recommended.

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