Ownr gives you full control over your company's share structure, allowing you to create and issue new shares at any time. Learn about what a share issuance is and how to perform a share issuance.
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.
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.
Before you get started
When a company issues shares, it increases the overall number of issued and outstanding shares in its capital structure. This is referred to as dilution. It reduces the ownership stake of existing shareholders by creating new shares.
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.
It is highly recommended that you speak with an accountant prior to issuing shares.
You will be asked to enter a total price for the share issuance. More information on setting a price for shares can be found on the Price per share article.
Changes to shareholders will reflect on your Cap Table automatically on Ownr.
Issue shares
1. On the sidebar, go to Company > Shares > Issuances.
Existing issuances will show on the Issuances page.
2. Click + Issue New Shares. The Issue New Shares window will appear.
3. Enter the number of shares, class of new shares to be issued, total price of the new shares, and the contact information for the new shareholder.
You are able to select a person or a company as a shareholder. If you select a company, you will be asked to provide information for a company representative as well.
Once 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. Ownr will send the new shareholder a "Notice of Issuance" to confirm that the shares have been issued.