QUESTION

Can we pay our employees or consultants with equity or stock?

SHORT ANSWER
In some cases, yes, but it is important that this be structured correctly. 
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It is important to structure equity compensation correclty. securities and tax laws could result in significant civil and criminal penalties if not properly followed.  Also, you need to make sure that you are following appropriate state and federal regulations in paying employees, whether or not part of their compensation is offered in the form of equity.