Founders payment for shares process

In a restricted stock purchase agreement, paying for shares correctly is essential to avoid legal complications. Typically, the process involves issuing a check dated the same day as the agreement, with the founder either delivering it to a company officer or, in solo-founder cases, retaining it themselves. The company should keep a copy of this check as proof, then deposit it into its account as soon as possible. If the bank account is not open, the company can temporarily hold the check.

When a check is not feasible, alternative methods—like PayPal, wire transfer, or ACH—are acceptable as long as there’s a clear payment record. For international founders, payment is safest in the agreement’s currency (often U.S. dollars). They may need to convert funds beforehand and should ensure the company receives the correct amount after any fees.

If the purchase date varies from the agreement date, this should be noted in records, especially if filing an 83(b) election. Consulting with a tax or legal advisor can help navigate these requirements and ensure compliance.