Issuing new stock is a big step for any S Corp. It means bringing in new investors. Or, it could be for existing shareholders. A formal letter is needed to make it official. This letter is used to document the stock issuance process.
We understand writing legal documents can be tricky. That’s why we’re here to help. We have created sample letters. These are easy-to-use templates. They cover various scenarios for issuing new S Corp stock.
Use these samples as a guide. You can customize them to fit your specific needs. We aim to make this process simple. Let’s get started.
Sample Letter To Issue New S Corp Stock
**Sample Letter To Issue New S Corp Stock**
[Your Company Letterhead]
[Date]
[Recipient Name]
[Recipient Address]
**Subject: Issuance of New S Corporation Stock**
Dear [Recipient Name],
This letter confirms the issuance of [Number] shares of our S Corporation stock to you. These shares represent [Percentage]% ownership in [Company Name].
The shares are being issued at a price of $[Price per share] per share, for a total investment of $[Total Investment].
Enclosed you will find your stock certificate. Please sign and return the attached acknowledgment form to confirm receipt.
We welcome you as a new shareholder and look forward to your participation in the company’s future.
Sincerely,
[Your Name]
[Your Title]
html
How to Write Letter To Issue New S Corp Stock
Subject Line: Clarity is Key
- Keep it succinct. Something like “Issuance of New S Corp Stock” works wonders.
- Refrain from unnecessary jargon. Opt for straightforward language.
- Include the company name for immediate recognition, e.g., “Acme Corp – Stock Issuance.”
Salutation: Addressing Stakeholders Properly
- Use a formal greeting. “Dear [Shareholder Name]” demonstrates respect.
- If addressing multiple shareholders, “Dear Valued Shareholders” is a solid choice.
- Avoid overly casual greetings; this is a formal communication.
Introduction: Setting the Stage
- Briefly explain the purpose of the letter: new stock issuance.
- Reference the authorizing resolution or board meeting where the decision was made.
- State the number of shares being issued and to whom they are being allocated.
- Example: “This letter serves to formally notify you of the issuance of [Number] shares of Acme Corp stock, as authorized by the resolution passed on [Date].”
Body Paragraph 1: Details of the Stock Issuance
- Specify the class of stock (e.g., common, preferred).
- State the par value, if applicable.
- Outline any pertinent rights or restrictions associated with the newly issued stock.
- Be explicit about the price per share, especially if it’s not at par value.
Body Paragraph 2: Payment and Delivery
- Detail the payment terms and methods (e.g., cash, services).
- Provide instructions on how and when to remit payment.
- Explain how the stock certificates will be delivered (e.g., physical certificate, electronic transfer).
- Set a clear deadline for payment to ensure timely procession.
Body Paragraph 3: Legal Disclaimers and Further Information
- Include a standard disclaimer stating that the letter is for informational purposes only and does not constitute legal or financial advice.
- Advise shareholders to consult with their own legal and financial advisors.
- Offer a point of contact for any questions or clarifications regarding the stock issuance.
- Example: “We encourage you to consult with your legal and financial advisors regarding this matter. Should you have any questions, please do not hesitate to contact [Contact Person] at [Contact Information].”
Closing: Formal Farewell
- Use a professional closing, such as “Sincerely” or “Respectfully.”
- Include your name and title.
- Ensure the letter is signed by an authorized representative of the S Corp.
- Consider adding the company logo for a professional touch.
html
Frequently Asked Questions: Issuing New S Corp Stock
This section provides answers to common questions regarding the issuance of new stock in an S Corporation. Understanding the process and implications is crucial for compliance and maintaining accurate records.
What is an S Corp Stock Issuance Letter?
An S Corp stock issuance letter is a formal document that confirms the issuance of new shares of stock by an S Corporation to an individual or entity. It outlines the details of the issuance, including the number of shares, the price per share, and the date of issuance.
Why is a stock issuance letter necessary?
The letter serves as proof of ownership and is vital for maintaining accurate corporate records. It’s also necessary for tax purposes and can be required when transferring shares or undergoing audits.
What information should be included in the letter?
The letter should include the S Corporation’s name and address, the shareholder’s name and address, the date of issuance, the number of shares issued, the price per share, the total consideration paid, and a statement that the shares are validly issued.
Who should sign the stock issuance letter?
The letter should be signed by an authorized officer of the S Corporation, typically the President or Secretary, to confirm the validity of the stock issuance.
How should the letter be delivered to the new shareholder?
The letter should be delivered to the new shareholder via certified mail or other trackable method to ensure receipt. A copy should be retained in the S Corporation’s records.