I purchased a C-Corp company from my friend 3 years ago (this is a really small business). At that time there were only three allocate shares of the company - himself, and a two investors (a married couple that were his friends).

I bought all the company stock (versus assets) so now I have all the share signed and turned over to me. I've been running the company as if it were a sole proprietor so I found no need to re-allocate the capital stock.

I now have a business partner that I would like to make part owner of the company. I have no idea what I need to do to re-allocate the stock of the company.

What do I need to do to re-allocate stock for offering?

Thanks for any advise?

Depending upon the state you are in the C-corp was "authorized" so many shares that could be issued without further approval. Most states authorize around 30,000 shares for a new corp. Look at the articles of incorporation that was submitted to incorporate. You can always issue as many authorized shares as you wish as long as they are issued at least for fair market value at the time of issue.

As an example since you are the only shareholder you could simply write cancel on the current shares and issue 51% of the authorized shares to yourself now as your 3 shares would have the same value as 51% of the shares since the value of the C-corp has not at this time changed.

Then, you can sell as many of the remaining shares as you wish for whatever price you can get for them (that would be fair market value). However, after you sell to a nonrelated party you can no longer issue yourself additional shares without paying fair market value.

Issuing shares is simply typing up the paper and signing as president and or secy of the corporation. Canceling shares is as easy as marking them canceled and/or disposing of them. However, these actions should be document in the corp minutes although technically that is not required unless it is a requirement of your state laws.

The stocks I purchased were official state documents that says "This certifies that John Smith owns 65 shares of Acme Corp."

How do I re-issue these official state documents? How do I find out how much "authorized" stock I have? It does spell things out like that in the bylaws.

Thanks