Cofounders want to setup company with only 20K shares authorized

My cofounders seem to agree that we should incorporate in the state that they are living in (not Delaware)(I lived out of state for the moment). While we are in agreement as to filing as a C corporation, they also seem to be of the opinion that we should authorize about 20,000 shares total. They want to do this for 'tax purposes'. Is that a thing? I was part of another startup where we filed as a C corp and issued 10M shares. It didn't seem to have any tax implications. We all signed out 83(b)'s and there were no issues. Why would someone want to only authorize 20K shares? They realize that we will need to raise some capital from investors eventually to scale, so I don't get it.

submitted by /u/face_eater_5000
[link] [comments]
Startups – Rapid Growth and Innovation is in Our Very Nature!

(Visited 3 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *