Client formed his own company to purchase a restaurant without consulting me.
He managed to pursuade a husband and wife to lend £45k
He has lent £22.5k
His daughter £22.5k
The balance of purchase price loan from bank.
So far only 1 share allotted on incorporation.
He now tells me the agreement (drawn up by solicitor) which I have not seen makes provision for payment (not sure if dividends) to the husband and wife and after 3 years the husband and wife will "relinquish" (his word) the shares for no consideration.
He now asks if alphabet shares could be issued to enable different dividends.
1 I assume they can be issued with change of articles?
2 What is situation in 3 years assuming the company has reserves and therefore the shares have value above par. Can the husband and wife gift at nominal value? (always assuming the agreement is robust enough).
3 Would it be more appropriate to issue redeemable shares to husband and wife.