Thursday, September 15, 2011

How does one go about selling stock in a new, private corporation ?

When forming a new corporation, I want to know how to sell stock of that corporation to raise capital to grow the business. This is possible for a brand new company, right? Or must it be established in order to sell stock? (I'm sure that'd help, but it's not necessity is it?) I know it requires finding private investors to purchase the stock, but primarily what I want to know is how to go about setting things up to do that.





I have several ideas for businesses that I want to start, but I don't have the capital to do it. I was thinking I could start a corporation to house these various businesses, and sell stock in said corporation to raise funds for those businesses.





Thank you for your time.|||You hand out Private Placement Offering documents to potential investors. At my company, it was a fairly long legal document and it explained that the investment was for a PPO and not a public company, yada yada yada. I think lawyers and accountants probably know how to draft these. But once it's made, you just make copies and hand them out.





Then, if someone decides to invest, you have a book of stock certificates. You make out their certificate for the amount they are investing (how much stock they will own) and you have to do some other paperwork and keep track of all this. When it's tax time, you have to inform the investors if you had a loss or a gain and there are tax forms you have to send out to everyone.





Good luck! :)|||Go to a lawyer. I don't like them either, but you have to make sure that the prospectives that you give - both written and oral - comply with the law. You can get some intent to purchase agreements that tie both parties to an agreement to purchase once the company is established and stock is a reality. That would help in getting a loan to start the business.|||Network your friends and aquaintances first then post ads in local paper for interested parties. Ask your accountant for anyone he knows etc.

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