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Is there a fee for having more shares upon incorporation? For example...
Anonymous3 views3 answers
If I incorporate with 10,000,000 shares, will it cost more than if I incorporate with 1500 shares? Will it cost more in tax? Will it cost more in fees? This is for incorporating in Delaware.
Typically if you allocate a very low par value, you will not incur a significant tax burden or fees. That said, it is important to understand, plan and accordingly file your Certificate of Incorporation with a specific authorized share capital. It is best to consult an experienced counsel on these issues instead of second guessing such basic provisions and then having to change/amend them later.
Janet Spiro MartinFranchise LawyerMission Viejo, CA ·
Generally the lower amount of shares and the lower par value per share will result in lower fees. DE is one of those states that the annual fees and taxes are based on number of shares, as well as the value of assets; you will also need an agent for service of process there, and if you do anything whatsoever in CA, you'll have to file in CA too.
You are acting wisely to ask this question before forming your Delaware corporation.
The blog post at the link provided below discusses how the DE franchise tax is related to the number of shares and the par value, if any. The basic principles to keep in mind:
- If you authorize only a small number of shares, no-par is OK.
- If you authorize a large number of shares, specify a small (fraction of a cent) par value.
