Apportionment of equity is a key reason for incorporating the business enterprise. Realizing this benefit requires implementing the tools and contracts necessary to apportion and control stock allocations, rights and responsibilities. The various transaction possibilities include stock purchase and sales, shareholder restrictions on resales, voting proxies, stock option plans and agreements. Each of these transaction rights must address stock ownership as a property right to which the shareholder has title. This reality limits the level of discretion exercisable by the corporation in imposing restrictions or establishing contractual arrangements. Incidental to stock ownership is the shareholder's right of voting control and participation in profits and distributions. Managing these rights effectively requires full compliance with state law and you will want to consult with local counsel in developing an appropriate enforceable strategy for your corporation. Please also note that sales of stock and equity may be subject to state blue sky laws and federal securities law provisions. You will want to consult with securities counsel in such transactions to determine applicability or exemptions that may be available.
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