I am happy to have used Harvard Business for my registered agent service. I guess I should use your blog more often.

Go Delawareinc Go !

When it comes time to seek outside investors, the corporation’s directors may take into consideration the company’s current valuation and set the sale price accordingly. Changes to sale price of the shares do not require the Certficate of Incorporation to be changed. However; if the board decided to increase the par value of the authorized shares, or authorize additional shares, then an amendment to the Certificate of Incorporation will be necessary.

First of all, thank you very much for the service provides through HBS.

I recently incorporated and doing the initial balance sheet to disclose the contributions in investments (assets/cash).

It is a small company with conservatively 50K in combined startup assets which likely will raise in value due to the projected income.

I am looking to get some investors to sell a portion of the business (30%) and rise some capital capital on the way, but I have few questions:

-Since there is a starting set value of the company, do I need to change the Par Value in the Certificate of Incorporation/Stock Certificates in order to require a minimum amount of cash for outside investors?

-By doing so, does this change will impact the Delaware Franchise Tax and my state corporate taxes? I want to keep the same number of shares (1,500)

-Will this change also imply additional filling fees?

-On the other hand if there is no need to change anything (Certificate of Incorporation or Stock Certificates) can the current valuation of the company be kept internally and the board decide the sale price?

Thank you very much in advance,

Rafael

Aside from the LLC’s annual responsibility to file federal income taxes with the IRS, additional income tax filings may need to be made in the State, and even the city where the LLC physically conducts its business. Typically, LLC’s formed in Delaware but with no physical activity (i.e. store front, banking, etc.)in Delaware will not pay income tax to Delaware, but instead pay that to the state where physically located. For further information about local taxation, we strongly suggest that you seek the assistance of a tax professional in your area.