How does the new LLC determine the total number of issuable shares?

How is the number of shares to issue and share price for a company which does not have estimate about the final product value?

• I am registering a company in the Australia for my startup. My lawyer wans the number of shares to issue and share price for registering the company. He said me “estimate the app plus the patent and then determine the number of shares and share price. For example, with the amount of time spent for the creation of the product and getting patent, the estimated value would be say $1m, then at a share price of $0.10 the total number of shares issued will be 10m”.   The problem is I do not know how much is the value for a web2 social network. The product, team, number of users and many factors will be in the future (Good example Zynga). I want to know is there any roughly valuation and calculation for this? Moreover, if we register the company with this structure can we change the share price or valuation later? And does it make any problem for us in the future? Thanks

• Answer:

  You need to speak to an accountant there are capital gains tax, stamp duty and other taxes that will be problematic when you make changes/sell later.