I’ve got a client who wants to set up a holding company and do a share for share exchange. I’m ok with the majority of this, but the part I am unsure about is the initial share ownership in the Holding company.
Old co. (to become the subsidiary) has 4 equal 100 ordinary shares shareholders.
Shareholders in the old co will swap each of their 100 shares for 100 shares in the new co.
But, when creating the new company what is the share structure to be created?
The company must have at least one director and shareholder.
If I create it with 400 shares in the same split and then do a share for share exchange, will the result be that I have to issue a further 400 shares in the new co. (therefore there being 800 shares) in order to do the share for share exchange?
Kind regards
Daniel
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Hi John,
Thanks for replying. Issue 1 share to my accountancy company (or any 1 of the current 4 directors), and then upon the share transfer create a further 399 shares to do the 400 shares exchange?
Simpler to issue it to one of the new shareholders so that you don't need to transfer it to one of them later.
