We highly value USACFO's hands-on experience in assisting us in maintaining a fully diluted cap table. Their expertise has been truly appreciated as they've guided us through managing multiple rounds of safe notes, equity dilution, and the complexities of stock options vesting seamlessly. Their meticulous approach ensures our cap table remains accurate and up-to-date.
We were immensely relieved to have USACFO's team on our side during our transition from an India-based structure to a US-headquartered company. Their deep expertise in flipping the India structure helped us navigate the legal complexities and successfully made the entire stock issuance process smooth and seamless.
USACFO is truly the best-in-class when it comes to providing comprehensive support to startups in the USA. In addition to their exceptional accounting and tax services, they have played a pivotal role in ensuring the precision of our incorporation documentation. Their expertise in founder and advisor equity allocation, stock options, safe notes, and cap table management has been invaluable.
Navigate the complexities of stock issuance with our expert guidance. From employee stock options to investor shares, we help you design and implement a tailored issuance strategy that aligns with your commercial requirements, protect shareholders interest and ensures regulatory compliance.
Two main types of stocks: common stock and preferred stock.
Common Stock: This is the most common type of stock and represents ownership in a corporation. Common stockholders typically have voting rights in the company and may receive dividends, although dividend payments are not guaranteed. In the event of liquidation, common stockholders have a claim on the company's assets after bondholders and preferred stockholders are paid.
Preferred Stock: Preferred stockholders have a higher claim on the company's assets and earnings compared to common stockholders. They often receive fixed dividend payments, which are paid before dividends are distributed to common stockholders. However, preferred stockholders typically do not have voting rights or their voting rights are limited.
The types of stock issued by a company depend on its capital structure and the terms outlined in its corporate charter and bylaws.
Issuing new stocks in businesses can have several advantages, including:
It's important to note that issuing new stocks also comes with potential downsides, such as dilution of existing shareholders' ownership and the need to meet regulatory requirements. Companies should carefully consider the implications before proceeding with a stock issuance.
The choice between buying preferred stock or common stock for a business depends on the specific needs and goals of the business. Preferred stock may offer fixed dividends and priority in asset distribution but often lacks voting rights. Common stock provides voting rights but may not offer fixed dividends. Businesses should consider their financial objectives and the desired balance of ownership and control when making this decision.
Employee stock options are typically managed through a structured program that includes grant issuance, vesting schedules, exercise periods, and communication with employees. This program is often administered by HR and finance teams in coordination with legal and tax professionals.