Founded gives you full control over your company's share structure, allowing you to create and issue new shares at any time. 

What is a Share Issuance?

A corporation issues shares whenever it creates new shares and gives those shares to a shareholder. The first share issuance happens after the company is incorporated and issues its shares to the first shareholders. But a company can continue to create shares and issue them throughout its lifetime. This is referred to as issuing shares "from treasury" - meaning they are shares created by the company, rather than transferred from one shareholder to another. 

The directors of the company can decide to issue new shares and set a price for those shares. A new shareholder then pays money into the corporation and receives shares in return. It is common for the shareholders to enter a Unanimous Shareholder Agreement to put certain rules and restrictions around when the directors can issue new shares and whether they need approval of the existing shareholders.

How to Issue Shares on Founded

Subscribers to Founded's Growing Company plan can issue shares at any time from the "Issuances" screen within the "Shares" tab. By clicking "Issue New Shares", users will be asked to input the number and class of new shares to be issued. The user will then enter the total price of the new shares and the contact information for the new shareholder (whether it's a person or a corporation). 

Once all this information is gathered, the company and shareholder will receive a Subscription Agreement containing detailed terms about the issuing of shares. The company's directors or shareholders will be asked to sign resolutions approving the share issuance. Finally, the company will send the new shareholder a "Notice of Issuance" to confirm that the shares have been issued. 

More information on setting a price for shares can be found here.

Dilution 

When a company issues shares, it increases the overall number of issued and outstanding shares in its capital structure. Put simply, it reduces the ownership stake of existing shareholders by creating new shares. So caution must be taken to ensure that the company is authorized to issue new shares, and that existing shareholders are aware of their reduced ownership stake. All of this information is stored and clearly displayed in the Founded account, and it can be easily exported as an Excel sheet by clicking "Export Cap Table."

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