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I recently started a company, and filled out a template form for equity share distribution between the three owners. On the form, it shows each name, than the number of shares assigned, and then a 'Consideration' column at the end that has a blank space open preceded by a '$'. How should I interpret that? Thanks!
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"Consideration" mean something of value that is given in exchange for something else of value. In the context of corporate stock, consideration means the capital contribution that has been made in exchange for the stock. This, in turn, will have other ramifications, such as tax implications, as the paid in capital will set the basis and value of not only the stock but of the corporartion, itself, and that value will have implications for many other things as well. I strongly recommend that you get the advice of an attorney and an accountant to be sure that you are setting a good foundation for the business.
Answered on May 18th, 2016 at 10:37 AM