[GNC] Bootstrapping and Company Ownership.

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[GNC] Bootstrapping and Company Ownership.

jason
Good morning,

Currently, I am learning to have a legal entity (I am 19 years old, 21 years
old is the minimum legal age to have a legal entity). Which allows me to
have access to Series A Funding and so on.

My goal is to use GnuCash to record Company Ownership.

I am planning to bootstrap this company early (January, 2019) with $100,000.

Thus, the journal entry

1. Cash DB $100,000
2. Paid-in Capital:Jason CR $100,000

*However, I have a question, how do you properly manage the Company
Ownership?*

By the time I reach 21 years old, I will register my company as legal
entity. Thus, Series A Funding.

I am willing to let go 20% of Company Ownership to an Invenstor or some
Investors at $5,000,000 valuation (Cash DB $1,000,000). *How should I record
this and what account should I make?*

-Jason



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Re: [GNC] Bootstrapping and Company Ownership.

Stephen M. Butler
On 1/15/19 2:11 PM, jason wrote:

> Good morning,
>
> Currently, I am learning to have a legal entity (I am 19 years old, 21 years
> old is the minimum legal age to have a legal entity). Which allows me to
> have access to Series A Funding and so on.
>
> My goal is to use GnuCash to record Company Ownership.
>
> I am planning to bootstrap this company early (January, 2019) with $100,000.
>
> Thus, the journal entry
>
> 1. Cash DB $100,000
> 2. Paid-in Capital:Jason CR $100,000
>
> *However, I have a question, how do you properly manage the Company
> Ownership?*
>
> By the time I reach 21 years old, I will register my company as legal
> entity. Thus, Series A Funding.
>
> I am willing to let go 20% of Company Ownership to an Invenstor or some
> Investors at $5,000,000 valuation (Cash DB $1,000,000). *How should I record
> this and what account should I make?*
>
> -Jason
Those are questions for your CPA.  Depending on your locality, the rules
may differ (and the CPA might have their own opinion of how they want it
shown when you file).

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Re: [GNC] Bootstrapping and Company Ownership.

jason
As of right now, is it okay to record it under DB Cash and CR Paid-in
Capita:Jason ? OR should I use CR Common Stock:Jason acccount?



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Re: [GNC] Bootstrapping and Company Ownership.

elvis-5
> As of right now, is it okay to record it under DB Cash and CR Paid-in
> Capita:Jason ? OR should I use CR Common Stock:Jason acccount?
>
  Did you issue common stock or is it a loan to the business from you?
You really should speak to an accountant.


>
> --

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Re: [GNC] Bootstrapping and Company Ownership.

Stephen M. Butler
In reply to this post by jason
On 1/15/19 2:26 PM, jason wrote:
> As of right now, is it okay to record it under DB Cash and CR Paid-in
> Capita:Jason ? OR should I use CR Common Stock:Jason acccount?

In my Assets I have a placeholder account called LLC Companies.  Under
that I have an account for each company that I own or have partial
ownership.  Money I put in is applied there with the other side being
the checking account (or wherever I took the money). 

But, that's just me sitting here in the State of Washington in the good
ol' US of A.

You can start out that way and then move the accounts however the CPA
decides they want to see it.

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Re: [GNC] Bootstrapping and Company Ownership.

jason
This post was updated on .
In reply to this post by elvis-5
I will issue a common stock, but I am not eligible to own a legal entity
until 21 years old. It does sound I loaned a sum of capital to the
business as of right now. Is it better to issue a common stock with par value
of $100. Although, I don't have a legal entity?



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Re: [GNC] Bootstrapping and Company Ownership.

Stephen M. Butler
On 1/15/19 2:44 PM, jason wrote:
> I will issue a common stock, but I am not eligible to own a legal entity
> until 21 years old. It's a dillema, it does sound I loan capital to the
> business as of right now. Is it okay to issue a common stock with par value
> of $100. Although, I don't have a legal entity?
>
Where are you located?  Sounds like what is legal here might not be
legal there.

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Re: [GNC] Bootstrapping and Company Ownership.

Jean-David Beyer-2
In reply to this post by jason
On 1/15/19 5:44 PM, jason wrote:
> I will issue a common stock, but I am not eligible to own a legal entity
> until 21 years old. It's a dillema, it does sound I loan capital to the
> business as of right now. Is it okay to issue a common stock with par value
> of $100. Although, I don't have a legal entity?
>

In the mid-1959s in New York State, a friend of mine and I wanted to
start a company and we were both under 18 years of age; we were still
high-school students. We did not want to issue stock, but there were
other problems:

1.) Banks would not allow us to have a checking account until at least
one of us was over 18.

2.) We had to file a declaration in City Hall called a Certificate for
Doing Business Under An Assumed Name, in which we had to state that we
were (legal) infants. An attorney was required to do this, and a fee
paid to the county clerk to file it.

3.) To set up a legal corporation, and issue stock (not listed on a
stock exchange), we needed a board of directors all of whom were adults
(i.e., over 21 years of age). A corporation like that was authorized to
issue up to 200 shares of stock, although the board of directors, if
authorized by a majority of stockholders, could authorize the issuance
of more shares. We never did set up the corporation.

I do not know if any of that applied in other jurisdictions, and I do
not  know if the laws are still the same as 50 years ago: I pretty-much
doubt it.


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Re: [GNC] Bootstrapping and Company Ownership.

Adrien Monteleone-2
In reply to this post by jason
This mailing list is not for official accounting or legal advice. It is for how to use GnuCash. (and help with any quirks, bugs, etc.)

Everyone’s situation is different, influenced by their personal circumstance and their local laws. You should seek the advice of a *local* CPA and/or business attorney.

We can’t (and shouldn’t) explain what you *should* do, but we can help you with *how* to make the accounting entries (and run the reports) using GnuCash once you’ve gotten that professional advice. (if the User Guide and Help manual don’t answer those questions for you)

Regards,
Adrien

> On Jan 15, 2019, at 4:44 PM, jason <[hidden email]> wrote:
>
> I will issue a common stock, but I am not eligible to own a legal entity
> until 21 years old. It's a dillema, it does sound I loan capital to the
> business as of right now. Is it okay to issue a common stock with par value
> of $100. Although, I don't have a legal entity?
>
>
>
> --
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Re: [GNC] Bootstrapping and Company Ownership.

jason
Also, thank you too, Jean-David Beyer and Adrien Monteleone.

I will seek for professional advice regarding this.

Best regards,
Jason.



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