One specific problem (amongst the many others pointed out in this thread) is stock transfer generally triggering a tax event. Specifically, gifting of stock req

One specific problem (amongst the many others pointed out in this thread) is stock transfer generally triggering a tax event. Specifically, gifting of stock requires, by IRS -amongst other reporting requirements- for you to: 1, calculate the value of the company; 2, determine the valuation of the stock; and 3, pay taxes on given year against that valuation. In most startup contexts, 1 & 2 is both costly, time-consuming, and non-productive, while 3 is not really desirable. There are structured ways to have founders, and stakeholders stock (or first proxies thereof) of the company in their assets without triggering these. Kindly consult with your accountant to figure out what these might be.