Entrepreneurship & Small Business

Are you supposed to issue shares before registering a business bank account?

  • Last Updated:
  • Nov 19th, 2019 11:03 pm
[OP]
Newbie
May 28, 2019
18 posts

Are you supposed to issue shares before registering a business bank account?

If you start a business account at a bank for a corporation, should the initial shares already be issued beforehand?
Last edited by Captain123 on Oct 18th, 2019 8:20 pm, edited 1 time in total.
2 replies
Deal Addict
User avatar
May 8, 2007
1102 posts
333 upvotes
Fraser Valley, BC
It would probably be a good idea to have the incorporation 100% done before setting up a bank account.

I set up a corporation many years ago and found most big banks were totally not interested in opening an account for a new start-up corporation, and would not do it at all. Find a bank or maybe credit union that is interested and ask them about the shares and the bank’s requirements.

If I was to do it again I would not set up a corporation. It is like creating a new person and you must do complete corporate financial statements and tax returns every year, that will be a lot of complicated work if you do it yourself, or expensive if you must hire someone to do it. The provincial authorities in charge of a provincial corporation can be rather abrupt and if they see something unallowed going on (such as they suspect you moved to another province) they can instantly de-incorporate you, not nice.

I would start an unincorporated company (a proprietorship) and operate that way until it was a worthwhile venture, and then maybe set up a corporation.
Newbie
Jan 21, 2011
54 posts
48 upvotes
Toronto
When you incorporate, see if your lawyer provided a report letter with instructions for issuing shares, it could say something like 100 shares of the stock were issued to you at $X.XX price per share (e.g. $1.00/share)

When you open a business bank account, just deposit $100 dollars into that account to represent the 100 shares(at $1.00/share as an example) issued.

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