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Equity in a private limited company

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  • 23-01-2019 7:53pm
    #1
    rob316
    Registered Users Posts: 18,111 ✭✭✭✭


    So, the growing family business I have worked for for years I am been given (well earned) 20%. Excuse my ignorance but what does it mean for me? I do sales, buying and day to day operations I know nothing about the accounting or ownership side. Its a LTD company

    What the upsides and downsides?


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    #2
    thegolfer
    Registered Users Posts: 346 ✭✭thegolfer


    rob316 wrote: »
    So, the growing family business I have worked for for years I am been given (well earned) 20%. Excuse my ignorance but what does it mean for me? I do sales, buying and day to day operations I know nothing about the accounting or ownership side. Its a LTD company

    What the upsides and downsides?

    You are now a shareholder of the business, owning 20% of the share capital of the company.

    Possibly you'll be made a director, however not a major issue.

    You'll have a say in how the business is run, also look for a copy of the shareholder agreement, voting rights etc.

    You're not a normal employee now.

    By taking this on are you taking on any debt obligation or guarantees?

    You can also now contribute to a directors pension.

    Possibly required to file an income tax return now.

    Ask questions of the company accountants.

    You will have stamp duty to pay as part of this transaction, possibly CAT depending on who has gifted you this shareholding.


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    #3
    antoinolachtnai
    Registered Users Posts: 9,793 ✭✭✭antoinolachtnai


    There are lots of technical things you need to learn about.

    But in general terms, the upside is that you are now at the 'inside' of the business, have some sort of say in its decision making and have a clear stake in its success.

    The downside is that you now have a lot of responsibility. You will one way or another end up in the middle of the politics of the company. You will have to learn about all of these things.

    The thing I would be most concerned about your story is that you have not really been prepared for what lies ahead. It has just sort of been assumed that you will figure this out.

    I imagine there is some sort of movement of power between generations going on here. If this is the case, I would really suggest your family and company get some sort of professional advice on the whole area to figure out how this will work.


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    #4
    Low Energy Eng
    Registered Users Posts: 298 ✭✭Low Energy Eng


    Most obviously, you will earn 20% of the companies profits/ losses.


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