Different commercial activities/share classes

A new client has two different 'trades' within same limited company

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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?

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By Tim Vane
03rd Jun 2017 14:46

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.

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Replying to Tim Vane:
RLI
By lionofludesch
03rd Jun 2017 15:03

Tim Vane wrote:

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.

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