Will Your Business Grow and Become a Public Company?

There is really only one way to go public, and that’s through a C Corporation. Nothing else is flexible enough to give you access to the widest possible shareholder base while maintaining control over business operations. Remember, S Corporations are limited in both the number of shareholders and their locations. C Corporations, on the other hand, can have a limitless number of shareholders, who may reside anywhere in the world.

Another huge advantage C Corporations have over S Corporations is their ability to have multiple classes of stock, whereas S Corporations are limited to one type only. This can be enormously helpful when you are trying to design a structure that will let you stay in control as your business grows and more shares are issued. One common method is to issue preferred, non-voting stock to a corporation’s founders, which can then be converted to voting stock when the corporation goes public. Now the founders can stay in control, even after several new million public shares have been added to the corporation’s bank of issued shares (called a treasury).

There are many variables when you’re structuring a business. That’s why it’s hard to go through a quick-service website. Unless you talk to someone who’s got some knowledge and experience on both the tax and the legal side, it’s hard to know what you don’t know. And that can leave you vulnerable.

Got questions? Contact us! We’re here for you.

Related posts:

Leave a Reply