when starting a new company, what is the right way to legaly confirm equity stakes?

Answer 1

Decide how many shareholders you will have and how much starting capital the co. needs, then decide how much each shareholder will put in as share capital and how much as loans. Once decided, let the company secretary know so she can pass the necessary resolutions. She will then issue the share certificates to the shareholders and also update the register of members which is conclusive proof of each shareholder's holdings. Just remember that when the co. is up and profitable, shareholders can take back their loans but there is no such thing as taking back capital unless you do a share buyback which is messy. If the co. doesn't do well enough to return the loans, the shareholders can convert the loans to more share capital.