Configure common and preferred share classes

Create the class from the governing records

Open Share classes and add a class. Enter its name, choose common or preferred, and record authorized shares and original issue price. Use the actual class name so certificates and imports can be reconciled consistently.

Authorization is the class limit; creating a class does not issue that many shares. Issuances are separate security records. An equity plan’s reserve is also a separate record.

The app checks issued shares against the authorized count wherever the count can be passed. Typing an authorized number below what the class has already issued warns at the field, a certificate or a round close that would take the class past its count warns before it writes, the CSV preview names a class a file would take over, and the split preview names a class its rounding alone would take over. A class already over its count is listed under Needs attention and marked over authorized on the Share classes table. Raising the count is a charter amendment, so record the amendment and then raise the number.

The Share classes table counts every recorded security, including records dated after today, and says so beneath the table when any exist. The dashboard and the cap table count those records from their own dates instead, which is why the two views can differ while a future-dated grant is on file.

Set preferred payment rights

For preferred stock, enter the liquidation-preference multiple and seniority. Higher seniority is paid first in the exit model; equal-ranked claims share proportionally when a tier has insufficient proceeds. Enable participating preferred only when that matches the class.

The controls express the app’s supported terms. They do not represent every possible charter provision. A participation cap or a dividend schedule is a separate, dated record: see the next section.

Record participation caps and dividend terms

Open Participation cap and dividends on a preferred class and append an amendment with its effective date and the charter or amendment it comes from. A cap is a multiple of invested capital, per holder, and the amendment states whether the initial preference and accrued dividends count toward it. Only a participating class can carry a cap.

Dividend terms record the annual rate, the accrual window, whether the dividend is cumulative, simple or compound accrual on actual days over 365, and what happens to unpaid dividends on conversion and at liquidation. Non-cumulative dividends accrue nothing on their own; record declarations and payments on the certificate. Amendments are permanent and dated: a later amendment changes results from its date on and leaves earlier accrual as it was. Each certificate in the class keeps the money it was issued for as its dividend basis through splits and transfers. Read Liquidation preferences explained for how a cap changes the exit model, and keep the signed terms attached.

Set the anti-dilution method

Select none, broad-based weighted average, or full ratchet. The round model uses the selected method when a lower-priced financing triggers an adjustment. If a recorded down round already lowered the conversion price, the form identifies that adjusted price separately from the original issue price.

Review Anti-dilution protection explained and compare the capitalization definition and exclusions in the agreement with the model. Selecting a label does not implement bespoke contractual exceptions.

Review changes against existing securities

After saving, inspect the issued certificates assigned to the class, the funding model, and an exit scenario. Class terms can affect all of those results. A class referenced by existing records can be protected from deletion, including closed certificate history. Read the specific dependency message; a zero current outstanding balance is not proof that the class has no records.

Use the stock-split workflow for a proportional restatement of share quantities and per-share terms. Editing the class price alone would not carry out a split across the company’s records.