afternoon,
a new client has an IT contracting business but also effectively a JV with a couple of mates to place other contractors. The A class of shares distributes all profits relating to Cintracting to the client. The B class distributes all profits from the recruitment to the 3 shareholders.
A bit messy but seems to function? Is he doing anything wrong or could he do anything better?
Replies (2)
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Do all the shares have equal voting rights? My worry for your client would be that his "mates" suddenly decide to vote all the divs to the B class shares and vote nothing to the A class shares. Then your client effectively has to share all his profits with them.
Do all the shares have equal voting rights? My worry for your client would be that his "mates" suddenly decide to vote all the divs to the B class shares and vote nothing to the A class shares. Then your client effectively has to share all his profits with them.
Agree. It's a disaster waiting to happen.