Issuing Stock to Founders using Stripe Atlas

    We’ll email you with information about issuing stock to founders immediately after your company is incorporated. We encourage you to read our guide to equity.

    New corporations can issue stock with standard terms using Stripe Atlas. If your company is a subsidiary of an existing company or if you’d prefer to customize the terms, Stripe Atlas also provides templates that you can complete with your lawyer.

    Issuing stock for new corporations

    For the first 30 days after incorporation, you’ll find a free tool to distribute shares to your founders in the Stripe Dashboard. Follow the steps below to issue stock using Stripe Atlas:

    Step 1: Review your company details

    First confirm your company details, then list the legal spouses of stock recipients so we can send them documents to sign. Finally, review your share allocation.

    The documents include the following key terms:

    • Acceleration, double-trigger acceleration
    • Price per share, par value chosen at incorporation
    • Share allocation, chosen at incorporation
    • Shares reserved, at least 20% of authorized shares remain unissued so they can be issued to employees, advisors, or service providers in the future

    Documents for companies with more than one stock recipient also include:

    • Vesting schedule, 4-year vesting; 1-year cliff
    • Vesting commencement date, company incorporation date

    Step 2: Founders and board members sign documents

    For stock to be issued, all board members, stock recipients, spouses (if applicable), and the company representative must sign the documents. These include the Board Approval, Common Stock Purchase Agreement, and Confidential Information and Invention Assignment Agreement.

    Step 3: Founders purchase shares

    To complete stock issuance, stock recipients need to purchase stock by making a payment for the value of their shares to the company’s bank account. The company must keep a record of this payment.

    Step 4: Founders consider filing an 83(b) election with the IRS

    Those with stock subject to vesting often benefit from filing an 83(b) election to avoid potentially substantial personal tax obligations as the company’s value increases. 83(b) elections must be filed within 30 days of the stock purchase; you can find a template in the Stripe Dashboard. If you’re unsure, work with your tax advisor to decide whether an 83(b) election is appropriate for you.

    Subsidiaries and modifications to our defaults

    If you incorporated a subsidiary through Stripe Atlas or want to modify the standard terms, you can work with a lawyer to issue shares. Free templates for you to use or modify are available in the Stripe Dashboard.

    For a subsidiary:

    • Certificate of Adoption of Bylaws
    • Subsidiary Stock Purchase Agreement and Board Approval

    For a new company:

    • Founder Stock Purchase Agreement and Board Approval
    • Board Approval of Founder Stock Issuance
    • Bylaw Certification
    • Confidential Information and Inventions Assignment Agreement
    • Section 83(b) Election Form

    Next steps

    Now that you know more about issuing stock, you may also want to read:

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