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Buy part of a company

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  • 22-04-2013 8:15pm
    #1
    Problem123456
    Registered Users Posts: 290 ✭✭


    Ok so I'm think of offering to buy 20% of a website because I think that it has the potential to be quite big if somethings are done.
    But I honestly don't have a clue what I am doing!!
    -How much should i offer if the website is estimated to be worth 4,000$
    -How much of a say would I have in decision making if I own 20%.
    -If we make a deal, how do I make it legal? Do we need to to make a contract?


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    #2
    dbran
    Registered Users Posts: 2,094 ✭✭✭dbran


    Hi

    How much is is worth? This is a difficult question and would be down to what you believe the potential of the website is after you have changed the few things you mentioned. It could be a multiple of the future earnings of the site discounted for level of risk and your time.

    On its own 20% is not a significant shareholding and if push came to shove you would not have a significant say in the running of the business. This of course would depend on the nature of the other percentage shareholders of the business. You would normally insist on putting a shareholders agreement in place.

    In order to make it legal you would have a shareholders agreement as well as have the company issue the shares to you or have the shares transfered to you via and ST4 form.

    Hope this helps

    dbran


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