This is not a substitute for legal advice.  An attorney must be consulted.

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What does Capitalization Mean?

Every corporation organized for operation should be adequately capitalized.  Capitalization will assure the corporate operations and permit the corporation to function as a viable entity.  Scrutiny may be given to the adequacy of capitalization by various taxing authorities or individuals or entities who, for some reason or another,  may wish to pierce the corporate veil in the event there is a belief that the corporation was established as a sham and without proper or adequate capitalization.  The Articles of Incorporation must describe the various classes of shares and the number of shares of each class that the corporation is authorized to issue.  

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Copyright © 1994 - 2014 by LAWCHEK, LTD.

This is not a substitute for legal advice. An attorney must be consulted.