This post is based on a question about how to add a co-founder to a corporation that I answered recently on Avvo. The question and answer are paraphrased below.
Q. I would like to add a co-founder to an existing corporation. Does the Founder Agreement need to be changed? How can I make a co-founder designation?
A. The term “add a co-founder” has little or no significance in this context.
What you apparently want to do is to associate with the corporation a third individual who will have rights equal to those of the two individual already so associated. This means, in all likelihood, that, at the least, you will need to:
- Amend the Founder Agreement.
- Have the board of directors approve resolutions authorizing the issuance of shares. (This might require amending the Articles of Incorporation.) Perhaps the board will want to appoint the third individual as an officer.
- Have the third individual appointed or elected as a director by the board or by the shareholders. (This may require that the bylaws be amended.)
- Issue a share certificate and update the share transfer ledger
Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.