How many shares should we allocate to a company such as this? Is there a normal/reasonable amount that is commonly used for companies such as this?
There is no "normal" number of shares to be issued - it is up to the parties setting up the company and often is governed by tax considerations - please seek specialist advice.
We set up companies with hundreds of thousands of shares, and some with only 1 ordinary share. You should remember that most ordinary shares of private companies are $1 shares, meaning that the shareholder is expected to pay the company $1 for every share issued to them.