Pls does anyone know how to distribute equity share to some one who wish to invest $20,000 in Total capital net of 250m project. What percentage to be issue to such person.
I will appreciate a relevant response.
Thanks you all.
Wow, this is a huge question. This should already all be decided in your corporate organization documents. Ya know, the ones you submitted to the office of the Secretary of State of the state you incorporated in?
You have to decide on a value for the company first, before you can decide on what you will issue. You also need to define if this person is an accredited investor and you need to outline if they are non-voting, or voting.
I have document templates for all this stuff, but that's just the start. You can message me and I will give you 10 minutes on this, but this is something you should definitely talk to a lawyer about.
@Garrett is right if you have a stock corporation, but you might not have stock. You don't need stock to distribute ownership, though it's a common method. If you're asking what's "fair" that's a matter of opinion. Typically you want to give the same terms to all investors, however there's nothing requiring you to do so. As a privately held company, you have different rules than a publicly traded company, though there are still rules.
It's also not clear whether your "m" is meant to mean thousand or million. I assume it's being used to mean $250,000, making $20,000 a more significant investment than if it were $250,000,000.
Your accountant, not your attorney, should be able to advise you on the future implications of trading equity for cash, in any configuration.