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Incorporate diploma

so typically what I room for authorized shares and so typically that will be a fairly high number the the sort of the standard is 10 million shares as authorized shares in the certificate of incorporation and one thing to understand is that authorized shares are not the same as issued shares so just because it says in your certificate in corporation that you can often that you have authorized capital of ten thousand shares I'm sorry 10 million shares that doesn't mean that you've already issued those shares and you have shareholders holding 10 million shares and typically when you start a company you will only issue a certain portion of those 10 million shares to the founders in the company and when I say that you need to leave some room what you need to leave room for is a stock option plan and a potential future financing where you know an outside investor comes into the company and is going to invest in the company so you know often investors will come in and they'll want preferred shares so they'll want shares that have special rights and shares that can be converted into common stock and so and typically the conversion rate will be one to one at least at first and so you've got a kind of plan and figure well you know how many shares do we need for the stock option plan that we want to create how many shares do we think we need to to reserve for you know our first round of financing and it's just better to allow yourself a little bit more room so that you don't have to go back and and amend the certificate of incorporation later because it's it's a bit of a hassle to amend the certificate of incorporation you have to get you know board and shareholder consents and then you have to make a filing with the state of Delaware or wherever whatever state your incorporated in to make that amendment so the only thing you want to be careful with is being aware if you're in Delaware with how the Delaware Franchise Tax works and you know because there's sort of two methods that in which they can calculate the franchise tax and if you don't do it the right way if you have a large amount of author stocke you could get a pretty high tax bill franchise tax bill from the state of Delaware but fortunately there's another method of calculating the franchise tax that isn't just strictly based on the number of authorized shares it's based on the value of your gross assets and the number of issued shares and typically for a startup company that is you know doesn't have much in terms of assets just getting started they can kind of control the amount of that franchise tax it won't be won't be a significant amount going forward but just something to keep in mind in terms...