Fig. 85. A SEAL PRESS
(4) The New York transfer law also requires New York companies to keep a stock transfer book which shows when shares, or certificates, are sold, or transferred, by one person to another.
(5) A stock ledger is also needed by every corporation to enter the stock transactions of each day in. A combination book with all of the three last named can be bought ready for use.
(6) A corporate seal, which is an embossed impression of the name of the company, see Fig. 84, is made by a seal press as shown in Fig. 85, and this is also required by law. The whole outfit above described for incorporating and maintaining a company can be bought for the small sum of $10 or less of the Brown-Green Company, 48 John Street, New York City.
How a Stock Company is Operated.—When you receive your certificate of incorporation you can then call a meeting of the directors (named in the certificate of incorporation) or board of directors as they are called. At this first meeting the directors elect the officers, that is a president, a secretary and a treasurer.
The president then takes the chair and the secretary writes down all the minutes of the business transacted at this and subsequent meetings. The first business that will come before the directors after the election of the officers is to make the stock of the company full paid. To do this you must turn your invention and patent over to the company in exchange for the full amount of the stock the company is capitalized for, say $10,000. In other words you sell your right, title and interest in the invention and patent for $10,000 worth of stock, which is all of it.
Next you turn back into the treasury of the company 45 per cent, of the stock and keep 55 per cent. for yourself. The 45 per cent. of the stock in the treasury, which is called treasury stock, can then be sold at its par value, that is full value, which is $100 per share or at any smaller price the board of directors may agree upon. The sale of the treasury stock gives the company the capital it needs to start the business and to keep it moving until it becomes self-supporting.
If $4,500 is not enough money to finance your company then capitalize it for whatever amount you think will be needed and add about 50 per cent. more to it. You can incorporate a company for $100,000 just as easy as you can for $10,000, but this is a matter you and your friends should consider most carefully.
Should you at any time sell more than 5 per cent. of your holdings, that is of the stock you own, the control of the company will pass out of your hands and the other directors and stockholders will whip-saw you as they like, if they can pull together, for the majority of the stock will be in their hands.