How Many Shares Should Your Startup Authorize Upon Launch

New startups often launch with 10 million authorized shares. Founders often ask me, “Why 10 million shares?” 

Before answering how many shares of stock a new startup should issue, founders must first understand the difference between authorized, issued, and outstanding shares. 



What Is The Difference Between Authorized, Issued, and Outstanding Shares?

The number of authorized shares is the maximum number of shares that a corporation is legally allowed to issue to its investors and stockholders.  When a corporation is formed, founders will submit a certificate of incorporation (also called the “charter”) to the appropriate Secretary of State.  Among other things, the charter includes the maximum number of shares that the corporation is authorized to distribute or “issue.” 

Issued Shares are the number of authorized shares that the corporation has actually issued to all its stockholders. Legally speaking, the number of issued shares cannot be greater than the number of authorized shares.  

Outstanding shares are the issued shares that are currently outstanding. After being issued, a corporation may buy back shares that then are no longer outstanding.  



Think Of The Number Of Authorized Shares As Your Company’s Share “Limit” 

The number of authorized shares is much like a credit limit on a credit card.  Let’s say you have a $5,000 credit limit and your ABC Corporation only has 5,000 shares authorized.  The $5,000 limit is like the number of authorized shares — you cannot spend more than $5,000 credit limit, just like ABC Corporation cannot sell or grant more than 5,000 shares.  

Starting with its 5,000 authorized shares, let’s say ABC Corporation issues 2,600 shares. This is like the company spending $2,600 of its $5,000 “credit limit.”  You have $2,400 left to spend in your credit line, and ABC Corporation has 2,400 shares left to issue. 

Issuing more shares than there are authorized makes those additional shares voidable.  To issue more shares once you have reached the authorized limit, you need to amend the corporation’s charter, which usually requires approval from the board of directors and at least a majority of the existing stockholders (or whatever approval process the company’s charter or bylaws states).  

The stockholders might not be eager to approve of this change because increasing the number of authorized shares allows for the possibility to issue more shares that can dilute the ownership of existing stockholders.  



How Many Shares Do Startup Founders Need To Issue? 

The commonly accepted standard for new companies is 10 million shares.  When you build a venture-backed startup designed to scale, you will need to issue shares to an increasing number of employees.  

Authorizing 10 million shares means it will be unlikely you’d ever need to offer someone a fraction of a share.  A company can grant 10,000 shares to an employee which represents just 0.1% of 10 million shares.  Psychologically, that works much better than giving ten shares which would be 0.1% of 10,000 shares.  

Also, the price per share will be lower.  Let’s say two companies are each worth $1 million.  One company has authorized and issued 10 million shares, while another has authorized and issued 1,000 shares.  The first company would have a price per share of 10 cents per share.  The second company would have a price per share of $1,000.  As an investor, it can “feel” better to buy at a lower price. 

The quoted examples assume that the number of issued shares is at the maximum number of authorized shares.  Out of a company’s 10 million authorized shares, founders are typically issued anywhere from 5 to 7 million shares.  This practice makes sure that the founders always own a majority of the issued shares even when all 10 million shares have been allocated.  

To incentivize employees, startup founders reserve a percentage of the company to issue employees stock options or other equity incentives.  This reserved number of shares is called the “option pool” and is most commonly the number equal to 10 to 20% of the currently issued shares.  

The remaining number of authorized shares that are not issued or reserved for issuance is available to investors, usually as preferred stock.  



How Do You Calculate The Ownership Percentage Of A Startup’s Shares? 

When calculating the percent ownership of a corporation, do not count the authorized shares. Instead, focus on the number of issued shares. 

In the example of a startup with 10 million authorized shares, 6 million are issued equally between two founders so that each founder owns 3 million shares, or 50%, of the company.  If the founders wish to have a 10% option pool for employees, 600,000 shares are reserved for issuance as stock options (or other equity incentives).  

Please note that stock options give the right to purchase shares of stock but are not actually shares of stock, so a holder of stock options has no ownership in the company until the stock option is exercised.  



Summary 

Investors are used to seeing 10 million shares, but you can choose any number to authorize.  The key is to have enough shares to issue additional shares to incentivize employees and to raise funds from investors without immediately having to amend your charter every time you wish to issue additional shares.  

This article lays out the distinction between authorized and issued shares as well as some strategies related to allocating them, but please note that this post (1) is not provided in the course of and does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from qualified professionals. 



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How to Register a New Business in GA in 2026

To register a new business in GA, you need to choose a business structure, file Articles of Organization or incorporation with the Georgia Secretary of State, pay the state filing fee, obtain a Federal EIN, register for state taxes, and file your initial annual registration within 90 days. The full process typically takes one to two weeks. This guide covers the current steps and requirements for 2026 filings. Georgia is one of the most active states for new business formation. According to smallbusinessstatistics.com's 2026 report, Georgia logged 254,582 business applications in 2025, marking an increase from the previous year. The Secretary of State's systems and requirements are well-established, but there is no shortage of founders who skip a step and pay for it later. Doing each step in the correct order keeps your company legally compliant from day one. Miss the annual registration window, skip the tax account, or file under a name already taken, and you will spend more time fixing the problem than you would have spent avoiding it. Step 1: Choose the Right Business Structure The structure you choose shapes your taxes, personal liability, and paperwork load for as long as the business exists. Most founders starting a business in Georgia pick from three options: a sole proprietorship, a limited liability company (LLC), or a corporation. A sole proprietorship requires no state filing, but it offers no separation between your personal assets and your business debts. If the business gets sued, your personal finances are exposed. An LLC gives you that separation with relatively light ongoing requirements, which is why it is the most common choice for small business owners. A corporation makes sense if you plan to raise outside investment or issue stock, but it carries more compliance overhead. For most founders registering an LLC in Georgia, the LLC is the practical default. Step 2: Choose and Reserve Your Business Name Your business name must be distinguishable from every other active entity registered in Georgia. Before you file, search the Georgia Secretary of State's name database through the Georgia Corporations Division portal to confirm your preferred name is available. To register a business name in Georgia, follow these steps: Go to the Georgia Corporations Division search tool at ecorp.sos.ga.gov. Search your preferred name and any close variations. Confirm no active entity uses a name that could be confused with yours. If you are not ready to file immediately, submit a name reservation to hold the name for 30 days. Name reservation is optional. If you plan to file within a few days, skip it and go straight to the Articles of Organization. If you need time to prepare your operating agreement or gather member information, the reservation holds your name while you get ready. Step 3: How Do You Register an LLC or Corporation with the Georgia Secretary of State? Filing your formation documents with the Georgia Secretary of State is the step that legally creates your business entity. For an LLC, you file Articles of Organization. For a corporation, you file Articles of Incorporation. Both are submitted through the Georgia Corporations Division online portal. To file for an LLC in Georgia online and complete state registration, follow these steps: Create an account or log in at ecorp.sos.ga.gov. Select "Create or Register a Business" and choose your entity type. Enter your business name, principal office address, and registered agent information. Your registered agent must have a physical Georgia address and be available during business hours to accept legal documents on your behalf. Add the names and addresses of the organizer or incorporator. Review all information, then submit the filing along with the state fee. Download and save your filed documents once the Secretary of State processes the submission. The base state filing fee for LLC Articles of Organization in Georgia is approximately $100, per businessformation.us. State fees can change, so confirm the current amount on the official Georgia Secretary of State website before you submit. Processing time varies; the portal will show you the current estimated turnaround when you file. Step 4: File Your Initial Annual Registration and Understand Renewal Georgia requires every LLC and corporation to file an annual registration, and the first one is due within 90 days of your formation date. That deadline catches most new owners off guard because it arrives before your first full year of operation is even complete. After that initial filing, annual registrations follow a standard calendar cycle, due between January 1 and April 1 each year. Missing the deadline puts your business in noncompliant status. Continued failure to file can result in administrative dissolution, meaning the state cancels your registration entirely. Do not treat annual registration as optional. The fee is modest, but the consequence of missing it is significant. Set a calendar reminder for early January every year, and confirm the current fee and deadline on the Georgia Secretary of State's portal when you file your initial registration. For ongoing compliance, Georgia business registration renewal is a recurring obligation, not a one-time task. Step 5: Get Your EIN and Register for Georgia State Taxes Once your entity exists, you need a Federal Employer Identification Number (EIN) and the right state tax accounts before you conduct business. Follow these steps: Apply for your EIN through the IRS website at irs.gov/ein. The application is free and takes about 15 minutes. You receive your EIN immediately upon completion. Go to the Georgia Tax Center at gtc.dor.georgia.gov and create an account. Register for a Georgia sales and use tax account if you will sell taxable goods or services. Register for a withholding tax account if you plan to hire employees. Check whether your industry requires any additional state-level tax accounts, such as those for alcohol, fuel, or tobacco. Your EIN functions like a Social Security number for your business. You will need it to open a bank account, hire employees, and file federal and state taxes. Even single-member LLCs with no employees benefit from having one, because it keeps

Legal AI Tools: A Complete Buyer’s Overview for 2026

Legal AI tools now cover everything from contract review to case law research, and the market has grown to dozens of products built for very different users. A vendor sends you a 30-page services agreement on a Friday afternoon and you need to know if it's safe to sign by Monday. Hiring outside counsel for a same-day review can cost hundreds of dollars, and most small businesses don't have in-house legal staff standing by. That pressure is exactly why legal AI tools have moved from novelty to necessity. According to Wolters Kluwer's report, 92% of legal professionals now use at least one AI tool. This guide covers five tools that represent the main categories and identifies which buyer type each one fits. How We Chose These Legal AI Tools Five criteria drove every pick: accuracy and hallucination risk, price tier, target user type, feature depth, and jurisdiction coverage. Accuracy matters more in legal AI than in almost any other category. A hallucinated case citation or a fabricated contract clause can cause real harm. The Stanford Legal Hallucination Benchmark gives researchers and vendors a standardized way to measure this risk; PAXTON, for example, reported a 93.82% accuracy rate on a curated sample of it. Where a tool has published benchmark data, we note it. Where it hasn't, that absence is itself useful information. Price tier matters because the legal AI market now spans free consumer tools to multi-year enterprise contracts. According to GII Research's 2026 report, the legal AI software market was valued at $3.32 billion and is growing rapidly. That growth has produced tools built for very different budgets and needs. We grouped tools into budget, mid-range, and premium tiers so you can filter by what you can actually spend. Quick Comparison: Best Legal AI Tools at a Glance The table below maps each tool to its primary user, its standout feature, and its price tier. Use it to jump to the section most relevant to your situation. Tool Best For Key Feature Price Tier LegalMente AI Small businesses and startups AI paralegal, contract review, business formation Free tier; paid plans from $49/month AI Lawyer Consumers and freelancers Instant advice, document generation, multilingual Budget tier PAXTON Solo and small firm attorneys Case law research, hallucination benchmark published Premium tier Lexis+ with Protégé Mid-size and large law firms Agentic drafting with Shepard's citations Budget-tier entry, significant upgrade cost for AI features Lexlegis.ai (MIRA) Indian law practitioners 215 specialized legal skills for Indian law Not publicly listed 1. LegalMente AI: Best All-in-One Legal AI for Small Businesses LegalMente AI is an AI paralegal platform that gives startups, small businesses, and small law practices an AI paralegal named Para™ to handle everyday legal work. The platform covers four core tasks: answering legal questions, reviewing contracts with automated red-flag detection, drafting documents from templates, and filing business entities. Most legal AI tools make you choose between a contract reviewer and a document drafter. LegalMente AI handles both from a single interface, and it supports multiple languages with coverage of US and global law. If your vendor base or customer agreements cross borders, that multilingual reach reduces the cost of handling those documents. Pricing is straightforward. The free tier gives you one contract review and limited Para™ access, which is enough to test the platform before committing. Paid plans start at $49/month for the Clerk tier, $99/month for Associate, and $399/month for Partner. Business formation is available as a one-time purchase starting at $89, excluding state and third-party fees. All paid plans include a money-back guarantee. See the Pricing page for a full breakdown of each tier and business formation costs. If you want to understand whether the platform fits before committing to a paid plan, the free tier is a low-risk starting point. 2. AI Lawyer: Best Budget Legal AI App for Consumers and Freelancers AI Lawyer is a cloud-based tool that provides instant legal advice, document generation, contract review, and multilingual research for consumers and freelancers. It sits at a budget-tier price point, making it one of the more accessible entry points into legal AI for individuals without attorney support. The practical use cases are lease reviews, basic NDA generation, and quick answers to consumer legal questions. If you're a freelancer reviewing a client contract or a tenant trying to understand a lease clause, AI Lawyer can give you a starting point without the cost of a consultation. A few limitations are worth knowing before you commit. Per the tool's reviewed sources, users have reported difficulties with subscription cancellation and billing for free trials. Privacy statements are considered brief and lack detailed encryption protocols. If you handle sensitive business information, those gaps matter. Weekly pricing is also significantly more expensive long-term than monthly options, so read the billing terms carefully before you start a trial. For consumers and freelancers who need occasional legal guidance and aren't handling confidential business data, AI Lawyer fills a real gap at a price most individuals can justify. 3. PAXTON: Best Legal AI for Solo and Small Firm Attorneys PAXTON automates case law research, document drafting, and analysis of medical or billing records for solo and small firm attorneys. It is built specifically for legal professionals, not consumers, and its feature set reflects that focus. The most concrete data point available is its accuracy benchmark. PAXTON reported an average accuracy of 93.82% and a non-hallucination rate of 94.7% on a sample of the Stanford Legal Hallucination Benchmark. That figure is worth contextualizing: the benchmark tests were self-run on a curated sample and have not been independently certified, per litmustools.com. Still, it is the only tool in this overview that has published any benchmark figure at all, which matters when you're relying on AI output for court filings or client advice. PAXTON also secured significant Series A funding in 2025 to expand its legal databases, which suggests continued investment in coverage depth. It runs at a premium-tier price and is primarily focused on US law, with limited support

How to Register My Business Name Step by Step Fast

To register my business name in the US, you need to search your state database and the USPTO trademark system to confirm availability, choose a legal structure, file with your state agency, add a DBA if needed, appoint a registered agent, and apply for an EIN. Filing online gets most registrations done within one to three business days. Skipping any of these steps can mean filing under a name someone else already owns, or choosing a structure that forces you to re-file later at extra cost. The process has two distinct paths: one for sole proprietors who just need a trade name on file, and one for founders forming an LLC or corporation. Which path you take changes where you file, what you pay, and how much legal protection your name actually gets. This guide walks you through each step in order so you don't backtrack. Is Registering a Business Name the Same as Forming an LLC? No. These are two different legal acts, and confusing them is one of the most common mistakes new founders make. Registering a business name, on its own, puts a name on record. It does not create a separate legal entity. A sole proprietor who files a "doing business as" (DBA) name with their county clerk has a registered name, but the business and the owner are still the same legal person. If the business gets sued, personal assets are exposed. Forming an LLC or corporation is different. You are creating a new legal entity that owns the business name as part of its formation. The name gets registered automatically when the entity is formed, and the liability separation between you and the business becomes real from that point forward. The practical question is: do you need name protection only, or do you need the legal structure that comes with an LLC? If you are testing a side project under a trade name, a DBA may be enough to start. If you are taking on clients, signing contracts, or hiring anyone, forming an LLC is worth doing from day one. For a detailed walkthrough of the entity formation side of this process, the guide on key steps to form an LLC covers what to file, in what order, and what to watch for at each stage. Step 1: Check Whether Your Business Name Is Available Before you file anything, you need to confirm the name is actually free to use. One search is not enough. Run all three of the following checks before you spend time or money on registration. 1. Search your state's business name database.Every state maintains a searchable registry of active business names and entities. Go to your Secretary of State's website (or the equivalent agency in your state) and search the exact name you want, plus close variations. A name that differs by only one word or a punctuation mark may still create a conflict. 2. Search the USPTO federal trademark database.A state-level search only tells you whether the name is taken in your state. It does not tell you whether someone holds a federal trademark on that name or something confusingly similar. The USPTO TESS tool lets you search the full federal trademark register for existing marks that might conflict with your proposed name. This matters because a federal trademark holder can challenge your use of a name even if your state approved it. TESS is free to use and recommended before any registration filing. 3. Check the domain name and social handles.This step is not a legal requirement, but it is a practical one. If your exact business name is taken as a.com domain or on the platforms where your customers spend time, you will either operate under a fragmented brand or need to rebrand later. Run the search now, before you commit. A name that clears all three checks is one you can file with confidence. A name that clears only one or two may still create problems. The few minutes this triple-check takes can save weeks of legal back-and-forth after the fact. Step 2: Choose Your Legal Business Structure Your legal structure determines where you register, what you file, and how much protection your name gets. Get this decision right before you touch a single form. The four structures most US founders choose between are: Sole proprietorship: No formal state filing required to operate, but you and the business are legally the same person. To use a name other than your own legal name, you will need a DBA filing. Partnership: Two or more people operating together. Like a sole proprietorship, it offers no liability separation by default. A DBA or formal partnership registration may be required depending on your state. LLC (Limited Liability Company): A state-registered entity that separates your personal assets from business liabilities. The business name is registered as part of the formation filing. Corporation: A more formal entity type, typically used when you plan to raise investment or issue stock. The name is also registered through the state formation process. If you are a sole proprietor operating under your own name, you may not need to register a business name at all. The moment you want to operate under any other name, a DBA filing becomes necessary. If you want liability protection, an LLC or corporation is the structure that provides it, and the name registration happens as part of forming that entity. The structure you choose now shapes every filing that follows, so it is worth deciding before you move to the next step. Steps 3 and 4: How Do You Register My Business Name Online With Your State? Once you know your name is available and your structure is set, you file with the appropriate state agency. The exact agency and process depend on whether you are forming an entity or filing a DBA. Step 3: Register with your state agency. For LLCs and corporations, the filing goes to your state's Secretary of State office, or the equivalent agency