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I recently set up my company (C-Corp). In order to complete the stock purchase agreement, I had to deposit a check in the company's bank account addressed to the company.

What I did: I walked into my company's bank's local branch with the check filled out and addressed properly, gave it to the frontwoman telling her I needed to deposit this in the company's account as part of the stock purchase agreement. I am unsure as to whether she understood, given that she just added the deposit to the company's account with no special note (The note for deposits seen online). Note: I did keep a copy of the check for my own papers as well as the company's'.

My question is: Did I do it properly? Should I now complete the stock purchase agreement paperwork, listing the date of the purchase?

Just to make it clear: I used my own check.

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  • You bought your own company's stock with your company's money? – Putvi Apr 3 '19 at 21:18
  • @Putvi I used my own money... – Outsider Apr 3 '19 at 22:45
  • Does anyone else own part of the company? If you own all the stock in the company you make the rules as long as you aren't breaking the law in some other way. – Putvi Apr 3 '19 at 22:46
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    @Putvi I own all stock. So are you saying nothing is wrong and I can proceed with finalizing the stock purchase agreement? – Outsider Apr 3 '19 at 22:51
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    Also, I have never used clerky, but look into transferring IP to your company for shares instead of paying for them, if you can. – Putvi Apr 3 '19 at 23:07
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Take a look at this: https://medium.com/rough-draft-ventures/a-rough-draft-of-the-legal-basics-part-3-issuing-equity-to-the-founders-important-tax-and-ab93ce623517

It is up to the company to make the rules about it's stock, so you should put rules in writing if you intend to have more investors. Pay attention to the part of the article that talks about transferring intellectual property in exchange for shares. I think that is the best way to do it for you, if it applies to your business.

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What you are doing is far more elaborate than would be customary and it sounds like you are misunderstanding the obligations that apply to you.

When you form a corporation, normally you simply set up a corporate bank account, issue shares to yourself, put money in the corporate bank account, and note in organizational minutes that X shares were issued in exchange for $Y as a contribution to capital.

A stock purchase agreement between a corporation and its sole shareholder would be an unusual way to handle this and I've never seen anyone actually do that, although I suppose that there is nothing actually improper about it.

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  • Thanks for the answer. The problem I have with all that is how do I actually "issue shares to yourself" and "note in organizational minutes that X shares were issued in exchange for $Y as a contribution to capital" – Outsider Apr 4 '19 at 4:01
  • "how do I actually "issue shares to yourself" fill out share certificates that say so if you have certificated shares, or note it in the share ledger if you don't. "note in organizational minutes that . . . " write a document entitled organizational minutes that says this among other things related to the formation of the corporation, then sign it as secretary. See, e.g., slideshare.net/wbdcflorida/… – ohwilleke Apr 4 '19 at 4:09
  • Really! That's how easy it is? So whatever I write and sign is made official? So is it the same as say the president coming up with a law and signing it (ignoring all other checks...). – Outsider Apr 4 '19 at 4:20
  • @Outsider Yes. That's it. – ohwilleke Apr 4 '19 at 4:30

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