A question about owning an equity in a company (incorporation, attorney, CPA)
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I own a small consulting company. Currently I have a few equity deals, where I get X ownership of the company in trade for providing consulting services.
It puzzles me but all of the initial research and everyone seems to suggest that for me to own equity all that needs to happen is:
on the company's end, when filing the incorporation or reworking share ownership, they list my company along with shares or percentage and I sign a piece of paper.
To me that's odd. It just feels too simple.
Is this correct? any information on this subject would be highly appreciated. Thank you in advance!
What you are describing appears to be ownership vs options in a company. If you own shares in a company that is formed as a pass thru tax entity (i.e. LLC or S-Corp), there are tax consequences - you will be issued a K-1 every year. Documenting those shares can be done either through amendments to the company's shareholder's agreement (Corp) or Operating Agreement (LLC). Some companies actually issue paper certificates for shares or ownership units. Nevertheless, you can always document your acquisition of shares or ownership units through a purchase agreement.
Its in your best interest to involve an attorney and your CPA in these matters.
Now, if you are talking about options, then that is a different thing entirely.
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