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Share Structure - can this be done?

Hi There,

First time poster, long term lerker and procurement of fantastic information from this site!

I have the following situation and was looking for opinions on whether this is correct/what is required.

A small limited company, 2 directors, not connected/relatives. Share holding is 50/50 of the 100 £1 shares issued. Company is under new articles CA06.

A private investor known to them wishes to invest 20,000 into the company for a return of the profits - voting rights are not required/wanted. He would like a 30% share.

This type of issue I have not come across before and there appears to be a few ways to achieve the desired result.

My initial thoughts were to create a new class B non-voting share (via resolution) at nominal value of £666.67 (30 number). However, I am guessing to make this simpler dividend wise with the other shares, the other shares really they need a 35/35 split (call them class A)? How is the achieved? I cant clearly see whether I am required to transfer those shares, subdivide them and how and what to report (SH01, 02 etc etc).

Any help and guidance/easier method of what I am trying to achieve would be greatly received!

Regards

Replies

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Why?

"He would like a 30% share." Why? What is he trying to achieve?

If they had a third each wouldn't it be easier? The precision seems to be unnecessary. Are they expecting to close the company or are they going to distribute the profits as they arise?

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petersaxton wrote:

"He would like a 30% share." Why? What is he trying to achieve?

If they had a third each wouldn't it be easier? The precision seems to be unnecessary. Are they expecting to close the company or are they going to distribute the profits as they arise?

 

30% is generally the limit for eis/seed schemes, so that makes sense. You should suggest that they wait until 6 April 2012 where the investor may get 50% of his investment back under the new seed capital schemes.

One concern for the investor though, if he receives only non-voting shares... he does not own 30% of the company. He has no voting power. The non-voting rights will likely impact on entitlemetn to eis/seed too.

 

One caveat, if the investor is connected to either 50% shareholder, the eis/seed schemes won't work.

 

 

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Hi,

Thanks for the responses. There is no seed scheme etc, it is just a case of the investor would like 30% of the profit share for his £20,000 investment, but does not wish to have any voting rights at all (unsure why, but that is what he wants - "to be a silent shareholder").

The investor is not a connected party.

If there is an easier way to achieve this I am all ears! :- )

 

 

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Declare what you want

If he has a different class of shares you just declare a dividend for the share class. It doesn't need to be the same dividend as any other class of shares.

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Hadnt considered that and not really sure why........ :- ) Thank you!

 

 

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