What is a stock?
How to issue stocks, you ask? First, let us define what it means. A “stock” refers to the funds raised by the company as capital to start operating the business. A “share” pertains to a single unit of company stock.
Why issue stocks?
Corporations issue stocks for the purpose of raising business funds. Shareholders are the people investing their money in the business. Each “share” is a single unit of stock, representing the money invested by the shareholders of the company.
Shareholders enjoy certain rights which include receiving dividends, voting rights, and an ownership stake in the company. For these reasons, it is important to process the issuance of stocks in organizing a business.
Who approves the issuing of shares?
The board of directors approves and authorizes the issuing of shares. It depends on the amount that shareholders have spent on purchasing stocks.
In this article, you will learn how to issue stocks, so please read on.
How to Issue Stock
- Determine the Amount You need for Capital
- Determine the Number of Stock the Corporation is allowed to Issue
- Determine how much a share is worth
- Determine the Types of Shares to be Issued
- Review Regulations in Compliance with State & Federal Securities Law
- Drafting the Stock Subscription Agreement
- Issue the shares to complete the transaction