You incorporate and have the company with 50,000 shares authorized. You and your business partner grant yourself 10,000 shares each. This means that only 20,000 shares are issued. You and your business partner are the directors. You get a lawyer to create a legal agreement that you'll give each other the right of first refusal to buy the shares of the other. When you bring in new people, you can, as Directors authorize the company to issue new shares to your new partner. You may sell these new shares for cash or make them free based on a period of employment or for bringing in new business. Two notes of caution - if you bring in a third person - that new person's shares plus one of you's shares is a majority of the shares so the other original partner becomes a minority. This can lead to friction.

Second - as an incorporated business you need to make tax filings to the state and the federal government as this company is now a legal entity. Look into a "Subchapter S corp - as it makes the profits flow automatically to the shareholders.

Why would you want to sell shares in a company that is about to make good profits?

You cannot sell shares in a partnership.

If you want to raise money then you need to incorporate the business and then value it and then try and sell shares to a new investor.

Is it a saleable business or are you and your partner 'the business'? (what would the business be worth without you?)

The investor may not value the business as much as you do.

The investor may not want a minority shareholding in a private company as he would have no control over the business. What stops you spending all the profit on new cars, pensions etc. rather than distribute the profit to shareholders?

Need to know why you want to sell shares, or do you just want to sell the business?

You will have to hire an accountant to place an accurate valuation on the business, and a realistic value of shares. You will have to hire a lawyer to get registered as a company, and draw up contracts.

You should consider registering your stock with the SEC. Selling or even just offering to sell unregistered securities is a felony punishable by five years in prison.

Hello everyone,

So I have an interior design company with a partner, its 50/50 shares, we are starting to be known and i think we will be making good profits, what should i consider and how do i decide on selling my shares if someone new comes in?

Also how to i go on to buy shares from my partner, how do i persuade them?