Business:Concepts:Company
Summary
The following is information aimed at starting new limited companies ('startups').
Company Formation
- Company Name versus Trading Name:
- Explain
- Shares:
- Default number is 100 (ie 1 share = 1% of the company) in some countries and in others 1000 (ie, 1 share = 0.1% of the company).
- Note that both numbers are pretty difficult/small to exchange for sweat equity, so consider 10,000 (each share = 0.01%). So if you think the company's vision is worth $1,000,000, then a developer (@ $1000/day) might be worth 1 share.
- Directors are not necessarily Shareholders: Directors direct the company. Can be employees.
- Shareholders own a Share of the company.
- Allocation: all Shares have to be allocated to Shareholders.
- Q: Can the company keep some, to allocate to employees?
- Adding more shares:
- Q: When/Why.
- When an investor adds (eg: $1m more) do you transfer shares, or add shares?
- GST:
- A GST is needed in order to do business
- Date:
- A public company's record has to be kept up to date every year. By June, if you want to do that at the same time as personal tax records.