Padilla Law PLLC Archives - StartupsSanAntonio.com

How Many Shares Should Your Startup Authorize Upon Launch?

8Nov

By Jose PadillaNo Comments

How Many Shares Should Your Startup Authorize Upon Launch?

José Padilla is an attorney and the owner of Padilla Law PLLC, where he represents startups and investors. His practice focuses on the formation, seed and VC financings, private equity, acquisitions, strategic corporate transactions, and general advisory regarding corporate and financing strategy. New startups often launch with 10 million authorized shares. Founders often ask me, “Why 10 million shares?”Before answering how many shares of stock a new startup should issue, founders must first understand the difference between authorized, issued, and outstanding shares. What is the difference between authorized, issued, and outstanding shares? The number of authorized shares is the maximum number of shares that a corporation is legally allowed to issue to its investors and stockhol...

Why It Matters: SEC Modernizes Its Definition of an Accredited Investor

1Jul

By Jose PadillaNo Comments

Articles, Featured, Guest Posts

Why It Matters: SEC Modernizes Its Definition of an Accredited Investor

José Padilla is an attorney and the owner of Padilla Law PLLC, where he represents startups and investors. His practice focuses on the formation, seed and VC financings, private equity, acquisitions, strategic corporate transactions, and general advisory regarding corporate and financing strategy. In August 2020, the Securities and Exchange Commission (SEC) amended the definition of accredited investor. The SEC developed qualifications and rules under the Securities Act of 1933 to protect individuals from risky investments.Accredited investors can more freely invest in hedge funds' lucrative and risky world, private equity, venture capital, and equity crowdfunding. Private or unregistered securities are considered inherently riskier, so the Securities Act empowered the SEC to creat...

The 83(b) Election: What Startup Founders Need to Know

23Nov

By Guest AuthorNo Comments

Articles, Featured, Guest Posts

The 83(b) Election: What Startup Founders Need to Know

There's a critical choice founders must make when making a Section 83(b) election. The 83(b) election is a provision under the Internal Revenue Code that gives an employee or startup founder the option to pay taxes on the total fair market value of restricted stock at the time of granting.If one waits too long to decide, founders or employees granted company stock could face some profound tax implications. Let's start with the basics. What is Restricted Stock? While many startup companies give stock options to employees, some grant restricted stock to its founders and certain employees. Restricted stock is granted to a stockholder but limited in that it cannot be transferred or sold by that stockholder and may even be taken back by the company until certain conditions are met...