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Shareholders/partners?

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  • 31-05-2007 4:08pm
    #1
    prose
    Registered Users Posts: 15 ✭


    I have recently set up a small ltd company with my partner each owning 50%. Some of my peers indicated they to would like to become parters in the business also. I am wondering what is the best option to introduce new partners/shareholders without relinquishing my directorial status and the overall running of the company. Any advise? thanks


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    #2
    antoinolachtnai
    Registered Users Posts: 9,794 ✭✭✭antoinolachtnai


    Read the memorandum and articles carefully.

    Then plan on issuing extra shares to these new people. So if there are 10 shares in issue now and you each have 5, then you could issue another 5 shares to a newcomer, and then you will each own 1/3 of the company (5 shares out of 15)

    You could also issue 'b' shares to these people. This means that these shares are not equal to the original shares - for example, they might not have voting rights.

    An accountant or solicitor can sort out the paperwork for this for you.

    You may find it beneficial to have a shareholders' agreement, which you might need a solicitor to prepare. In particular you have to make sure there is a way to buy out other people's shareholdings if it comes to it.

    There are a lot of legal things to consider when you have multiple shareholders. You might want to consider reading or at least browsing through a company law book. Keane's Company Law is the famous one, but i'm sure there are other, easier to understand (and cheaper) texts.

    Whether it is a good idea to introduce new parties into the company (especially if they are not bringing capital) is another question altogether.


  • Options
    #3
    prose
    Registered Users Posts: 15 ✭prose


    Thanks Aantoinolachtnai,
    I appreciate your comments. I'm trying to look at all possible options, in some way I need the interested parties as they are a specialised group and their training is unique to our programe. (therefore I need to keep them sweet!) however to what extent is the question I'm asking myself. I would like to have them on board but not at the level they are requesting.


  • Options
    #4
    antoinolachtnai
    Registered Users Posts: 9,794 ✭✭✭antoinolachtnai


    You can actually give them options that don't vest immediately. Or you can give them a profit share (I recommend this if you can get them to do it).

    It gets complicated quite quick. I would suggest you propose the idea of them subcontracting to them, then suggest the profit share to them, and if they still want something with shares, ask them to come back with a proposal.

    Whatever you do, don't get yourself in the position where you are paying for legal and accounting advice to come up with a plan that will benefit someone else.


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