FREQUENTLY ASKED QUESTIONS/CORPORATE GOVERNANCE - How many shares shall I create to start?/


How many shares shall I create to start?


In France, all shares must be allocated during the company's incorporation. As a result, when writing the Articles of Association of your company, you will have to set freely the total amount of share capital, and the number of shares.


The number of shares will depend however on the direction and development you wish to give to your company. Indeed, the number of shares of your company doesn't need to be high at the time of the company's incorporation because in the beginning, the share capital will be distributed between the few initial founders.

However, the current trend in high growth young startups is to allocate shares to employees. This is to encourage employees to fully commit to the business of the company. Besides, you will potentially have to open your share capital to third-parties later on, in accordance to your business' growth. This can happen if you plan fundraisings for your company.

As a result, Alf recommend you start with a rather high number of shares. In this way, you will be able to allocate hundreds of shares to your employees (even though the value per share is low in the beginning) or to investors, and you will also be able to grant a number of shares better adapted to the exact percentage each investor holds.

We thus suggest you start with 10.000 shares. That's what most companies plan at the time of their incorporations in the United States. Besides, as you increase the amount of share capital, the nominal value of your shares will increase if you keep the same amount of shares.

Alf assists you in incorporating you company in France, as well as managing all your company's paperwork. To discover our services, please visit our website.