Module 1 · Chapter 2

Founding a Company

Founders get their first shares by subscribing for them. The money goes into the company, three different numbers sit on each share, and only the register and the constitution decide who holds it.

≈ 13 min read 8-question test

In this chapter

  • How founders get their shares, and where the money goes
  • Nominal value, issue price and share premium: three numbers on one share
  • Why only the register and the constitution can move a share

2.1Founding a company in one paragraph

A new company starts with an empty register. The founders apply for new shares and pay for them, and the company enters their names in its register of members (its own list of shareholders). Solaris was set up this way in Ireland in 2020. Elena Marsh took 2,400 shares of €1 and Cormac Duffy took 1,600, for €4,000 in all.

Their promises to each other went into a two-page founders' agreement. The Investment Agreement now carries it as Appendix 3. Every later deal in this workbook changes those first two lines of the register.

Key point

Check four things on any incorporation file. The money reached the company. Nominal value, issue price and premium are kept apart. Every promise to move a share is backed by an article in the constitution, and every share in the group sits with the right owner.

Also in this chapter

  1. Subscribing for shares: the money goes into the company
  2. Three numbers on one share
  3. Why nominal value is a floor
  4. Agreeing the founder split
  5. A promise that could not move a share
  6. The register of members decides
  7. The group built by accident
  8. One share in Warsaw
  9. Your job

Preview

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